Consumer complaint received 2015-05-13
Company: Shellpoint Partners, LLC
State: MD
Product: Mortgage
Sub-product: Conventional fixed mortgage
Issue: Loan servicing, payments, escrow account

Complaint:
PMI REMOVALTo whom it may concern : I refinanced my mortgage loan in XXXX, XXXX with a home value of {$110000.00}. My balance then was {$130000.00} and requires a Private Mortgage Insurance ( PMI ) contribution of {$100.00} per month. A recent appraisal was performed by Shellpoint Mortgage Servicing and accessed at {$100000.00}. I paid an amount of {$420.00} for the appraisal. An appraisal was demanded by Shellpoint in order to determine if I meet an LTV of less than 75 % in order to cancel PMI. 
When I made an inquiry to cancel PMI, the following conditions needed to be met:1. That my payment is current2. That there are no subordinate liens on the property3. That I have Shellpont Mortgage Servicing request an appraisal at my expense. Depending on my time in my home and other investor factors, my LTV requirement will range from 65 % to 80 % to qualify for early cancellation. 
4. That I meet any additional state or investor requirement. 
Shellpoint would not consider my request for PMI cancellation without my signature acknowledging the conditions above. 
Having made additional payments to principal, my loan balance of {$75000.00} and current LTV of 72 % for my low risk conventional Fannie Mae loan meets all federal requirements for cancellation of PMI. 
Shellpoint Mortgage Servicing however, would not cancel my PMI solely because of a decline in value of my home- from {$110000.00} to {$100000.00}, irrespective of a 72 % LTV. 
In fact, XXXX XXXX, Manager or Team Leader for Shellpoint reaffirms that as a guideline established by Fannie Mae ; that I would have to pay PMI as long as property value is less than {$110000.00} through Year XXXX - the year when PMI is initially scheduled to terminate. With my payment practice and without contributing lump sums towards principal, my loan balance will be near XXXX in XXXX. 
I asked XXXX XXXX if I am required to pay PMI even with a balance of {$20000.00} and a resulting XXXX of 19.05 %. She remained resolute stating a resounding yes! With that response, I figured I was dealing with -1. An incompetent group without an understanding of what PMI represents2. A group that simply would n't cancel PMI and make up reasons/excuses in the process and refer to such reasons/excuses as investor ( XXXX ) requirement. 
3. A group that misunderstands or ( dubiously ) misinterprets the Homeowners Protection Act 's guidance on Borrower-Requested Cancellation : when the principal balance is first scheduled to reach 80 % of original value based on amortization schedule and actual payments and that the property value should not have declined below original value. Shellpoint fails to realize that the decline in value implies that the 80 % LTV will no longer be valid and would lead to the denial of PMI cancellation request. It 's all about LTV!!! Not simply VALUE!!! 
4. XXXX, ( the investor ) requirement warrants that the servicer deny the removal of PMI if the property value has declined ( following a certificate of value or full appraisal ). It adds that the borrower can pay down the mortgage balance to the point that satisfies Fannie Mae 's applicable XXXX XXXX or XXXX XXXX ratio eligibility criterion based on the actual principal balance of the mortgage loan and the new appraised value of the property. ( XXXX Guidelines XXXX XXXX, XXXX, Mortgage and Property Insurance, Section XXXX, Page XXXX ) Please see pages XXXX and XXXX. 

The PMI is not a source of revenue and should not replace interest payments. It certainly should not be paid in perpetuity and must be cancelled when no longer warranted. 

Thank you.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation