Consumer complaint received 2019-12-16
Company: GATEWAY FIRST BANK
State: OK
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
I was told that after my home reached 78 % of the appraised value, that the PMI ( Private Mortgage Insurance ) would automatically be removed. My home was appraised for XXXX After paying my note down to XXXX, I called to see why the PMI was still being charged. I was told by a Gateway Mortgage Rep that the value of my home was not yet at 75 %? I explained that I looked on CFPB 's website and quoted them the following regarding Private Mortgage Insurance, " Even if you dont ask your servicer to cancel PMI, your servicer still must automatically terminate PMI on the date when your principal balance is scheduled to reach 78 percent of the original value of your home. For your PMI to be cancelled on that date, you need to be current on your payments on the anticipated termination date. Otherwise, PMI will not be terminated until shortly after your payments are brought up to date. '' I am fully current on my payments and have never been late. I have attached a copy of the appraisal value of my home. I have also attached a form from the company, Gateway Mortgage Group, stating that at 78 % ( not the 75 % that I was told on the phone by the representative ) of the original value of the property, the PMI would automatically be terminated. I have since learned that they base the Original value on the LESSER of the sales price or the appraised value. So I fell under the removal of PMI based on current value. For this Gateway Mortgage requires an appraisal. I asked the Gateway Mortgage representative who to use and was told to get a BPO or a licensed appraiser. I thought this sounded a bit strange, so I again looked to the form that I asked the representative to e-mail me. It clearly states " Only appraisals submitted by Gateway are subject for approval '' at the very bottom of the form. It also says that I MUST submit my request in writing at a specific email address and include the appraisal fee. Next came the " seasoning requirements. '' The representative tried to tell me that there was a condition based on the amount of time that I had the loan as to what percentage I had to meet. Again, according to the Consumer Financial Protection Bureau, " Other things to keep in mind about the Homeowners Protection Act Loan investors, including XXXX  XXXX  and XXXX XXXX, often create their own PMI cancellation guidelines that may include PMI cancellation provisions beyond what the HPA provides. But these guidelines can not restrict the rights that the HPA provides to borrowers. For example, the HPA does not contain any requirements for a loans tenure before a borrower may request cancellation or be eligible for automatic PMI termination ( known as a seasoning  requirement ). '' My complaint is that ended the phone conversation very confused. I was given incorrect or wrong information at each step. 
Problem 1- Loan Closing- was told that my PMI would be removed at 78 % of appraisal value ... WRONG Problem 2- Told the value had to be 75 % by Gateway Mortgage Rep ... .WRONG Problem 3- Told percentage of PMI condtioned  based on years ( seasoning ) ... .WRONG Problem 4- Told to Get your own Brokers Price Opinion or Appraisal by Gateway Mortgage Rep ... .WRONG ( this would have cost me between {$150.00} to {$500.00} if I had listened to the representative. ) Not only is it apparent that the representatives at Gateway Mortgage Group do not know the rights afforded for PMI by the Homeowners Protection Act, but do not even know the correct procedures within their own company. It is not acceptable to me that I should not only be misdirected, but told to go and spend money on something unnecessarily. If I had not caught the representative 's error I would have been out hundreds of dollars. In addition, the amount of confusion was inordinate.

Company response to consumer: Closed with explanation