Consumer complaint received 2022-02-02
Company: Specialized Loan Servicing Holdings LLC
State: TX
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
This is a complaint being submitted about CMC Funding INC ( serviced by Specialized Loan Servicing LLC ). They did not automatically cancel my PMI as they should have as per the PMI cancellation act under the Homeowners Protection Act. I've already contacted them and they've responded that I needed to notify them to cancel PMI, however that is not true because the amount I paid towards my mortgage should have triggered an automatic termination. 

Automatic Termination The Act requires a servicer to automatically terminate PMI for residential mortgage transactions on the date that : The principal balance of the mortgage is first scheduled to reach 78 percent of the original value of the secured property if the borrower is current ; or If the borrower is not current on that date, on the first day of the first month following the date that the borrower becomes current ( 12 U.S.C. 4902 ( b ) ). 
If PMI is terminated, the servicer may not require further payments or premiums of PMI more tha

n 30 days after the termination date or the date following the termination date on which the borrower becomes current on the payments, whichever is sooner ( 12 U.S.C. 4902 ( e ) ( 2 ) ). There is no provision in the automatic termination section of the Act, as there is with the borrower-
requested PMI cancellation section that protects the lender against declines in property value or subordinate liens. The automatic termination provisions make no reference to good payment history ( as prescribed in the borrower-requested provisions ), but state only that the borrower must be current on mortgage payments ( 12 U.S.C. 4902 ( b ) ). 

On XX/XX/XXXX I paid off {>= $1,000,000} towards my conventional home mortgage bringing the amount owed on of {$510000.00} down to {$170000.00}. This resulted in my principal balance reached over 78 % of the value of the property on XX/XX/XXXX therefore according to the Homeowners Protection Act my Private Mortgage Insurance should have been terminated. Instead, I was still charged the PMI on 4 different occasions, on XX/XX/XXXX for {$90.00} again on XX/XX/XXXX for {$90.00}, and on XX/XX/XXXX when I was charged twice for {$90.00} and {$33.00} for a total of {$300.00}. These were PMI fees that I should have not been charged since I had already paid off more than 80 % original value of the property. I called Specialized Loan services in XXXX and told them to stop the payments, they did eventually stop the PMI payments but they never refunded me the PMI payments of {$300.00} that I had already paid. The PMI should have never been charged since my lump sum payment on XX/XX/XXXX should have automatically terminated my PMI.

They're claiming that I should have requested for the PMI to be cancelled but that is not true according to their own policy and according to XXXX XXXX XXXXXXXX : Termination of Conventional Mortgage Insurance ( XX/XX/XXXX ).

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation