The Homeowners' Protection Act, passed by Congress in the summer of 1999, requires lenders to provide more disclosure about their PMI requirements and cancellation policies. Unfortunately, it only applies to real estate loans that were made after July 29, 1999. However, it has helped raised awareness of the PMI elimination issue to homeowners regardless of when they obtained their loan. In the past, the home's value was deemed to be whatever price the homeowner paid when they bought it. This is an important distinction since the value of virtually every home in San Diego has gone up significantly over the past decade.
Lenders require that the homeowner obtain an appraisal certifying the home's current market value.