Consumer complaint received 2017-06-27
Company: CITIBANK, N.A.
State: VT
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
My husband and I are homeowners. We took on a mortgage for our home of {$190000.00}. It was originally through Citi Mortgage, but now XXXX XXXX is an " investor '' of the loan. ( I 'm not sure if that means they are the owners of our debt or not ). <P/>Regardless, when we paid off enough of the mortgage to get to 80 % of the loan value ( as stated by the Homeowners Protection Act ), we were under the assumption that we could apply to have the PMI insurance cancelled. We spoke with several customer service representatives from CitiMortgage to go over how this process works, and they were also telling us we needed to get to 80 % of the original value of the loan. <P/>We applied for a home appraisal ( this cost us approximately {$900.00} because we were told " we live in a rural area '' -- even though the appraiser lived 20 minutes from our home ). We went through with the appraisal, we found our house remained at the exact amount we purchased it for. <P/>We spoke with the mortgage company several times trying to find out the exact amount we needed to reach 80 % of the mortgage. We were told an exact dollar amount, and we were about to put the remaining {$5000.00} towards the mortgage to have the PMI removed. When we called the mortgage company to verify the PMI would be dropped, they ONLY then informed us that we did not meet the " investor requirements- which state, we need to pay the mortgage down to 75 % of the original loan. '' I am confused here because under HPA guidelines, it states 80 %. The HPA defines cancellation date as, at the option of the borrower, either : ( 1 ) the date on which the principal balance of the mortgage is first scheduled to reach 80 percent of the original value of the property ( regardless of the outstanding balance ), or ( 2 ) the balance of the mortgage reaches 80 percent of the original value of the property based on actual payments. <P/>As I 'm understanding this, we qualify for option 2 - we paid off enough of the mortgage to reach 80 % of the original value. However, we were just told that we do NOT qualify for PMI removal because of " investor guidelines '' which override the HPA guidelines, and we are now required to reach 75 % of the original loan. <P/>We have wasted {$1000.00} in fees to have our house appraised, and a lot of wasted time and energy trying to save up the money thinking we would reach it at 80 %. <P/>Can anyone tell me why investor guidelines override the HPA? I am so frustrated and confused. How does an investor guideline override federal law? And why, when the new investor of our loan ( XXXX XXXX ) took over the loan ..why were we not mailed a letter notifying us of these new guidelines? Why was n't this made clear by all of the people we spoke with over the phone when we called multiple times during the process. <P/>At any point customer service reps. could have made it clear that we needed to reach 75 % of the loan, but this was never explained to us.

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