Consumer complaint received 2023-05-16
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: AMERIFIRST FINANCIAL, INC. (NM)

AmeriFirst Financial Inc is in violation of the Homeowners Protection Act of XXXX by first requiring me to have Private Mortgage Insurance ( PMI ) since the beginning of the loan when the original value of the home was well over 80 % of the original amount financed. Also, AmeriFirst Financial Inc did not automatically cancel the PMI when the borrower met the criteria as stated in this act or when borrower sent written request to cancel the PMI in XXXX of XXXX. I, XXXX XXXX, payed a {$90000.00} lump sum in XXXX of XXXX on the principle balance of the loan and requested cancelation of the PMI on XX/XX/XXXX. I received a letter from AmeriFirst stating I was denied the removal of PMI because I wasnt current on my payments when in fact I was. At this time, the only late payments were from AmeriFirst transferring the loan from the previous servicer and two payments got lost by the transfer so technically I was not late. I disputed the late payments and they were found by AmeriFirst Financial Inc and posted to my account but AmeriFirst never corrected the late payment status even though they were always made on time. 

I have been charged {$68.00} every month for PMI since the originating of the loan on XX/XX/XXXX. At the time of requesting cancelation of the PMI, my mortgage was under {$90000.00} and the appraisal of the home was at {$260000.00} with original loan amount of {$150000.00}. This is more than fifty percent ( 50 % ) lower than the value of the property so by law you are required to automatically cancel the PMI. I am current on my payments and I am requesting first the PMI be canceled immediately and second I want reimbursement for the PMI from the time I reached the 79 % equity requirements which is the start of the loan in XX/XX/XXXX which is 2 years and four months or 28 months of paying {$68.00} per month. The total of PMI insurance premiums for 28 months is {$1900.00} plus any interest and fees AmeriFirst charged to myself, the borrower.

According to the Homeowners Protection Act, AmeriFirst Financial Inc must automatically cancel my PMI immediately when the loan reaches 78 % of the original value of the secured property or cancel when borrower requests in writing to cancel. My original financing was {$150000.00} and the original value of the home was {$260000.00} which means my loan requiring PMI from the beginning was fraud because this would put my loan originally at 61 % of the original value. I let AmeriFirst know this when I initiated the loan and they were basing the 79 % rule off of the original amount of the loan and not the value of the house which is against the law. Then I paid a lump sum in XXXX of XXXX that brought my loan principal balance under {$85000.00} and that is when I requested PMI to be canceled and was declined that option. This would put the loan at 32 % of the original value of the home and only owing 56 % of the original financed amount which is well under the threshold for automatically removing the PMI. The appraisal we had completed for the financing requirements on this loan appraised the house as {$250000.00} for Indicative Value of Sales Comparison Approach. This appraisal was done for AmeriFirst Financial Inc by XXXX XXXX Integrity Appraisals on XX/XX/XXXX for the requirements of this loan and is what was used by AmeriFirst Financial to determine the value of this home for financing.

The Homeowners Protection Act states : The principal balance of the mortgage is first scheduled to reach 78 percent of the original value of the secured property ( based solely on the initial amortization schedule in the case of a fixed rate loan or on the amortization schedule then in effect in the case of an adjustable rate loan, irrespective of the outstanding balance ) if the borrower is current ; or Note the original Ammortization schedule with my loan does not reflect the original value of the home, only the original amount financed of the loan so is not correct determination of reaching the 79 % of the original value. 

AmeriFirst Financial Inc was also supposed to automatically cancel the PMI on the first day of the first month following the date that the borrower becomes current on payments which I had been current on my payments the entire loan with the exception of the two payments that were lost by AmeriFirst in the transfer of the loan as stated above was corrected and I was actually not late on payments during that time. 

Then the Homeowners Protection Act goes on to state : 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 ) ). 

So since I have on time payments and have always been current on my loan, AmeriFirst Financial Inc should have canceled the PMI according to this part of the law.

In the Mortgage Note under UNIFORM COVENANTS, Section 10. Mortgage Insurance ( b ) it states Any such agreements will not affect the rights Borrower has- if - any - with respect to the Mortgage Insurance under the Homeowners Protection Act of XXXX or any other law. It includes how to request and obtain cancellation of the Mortgage Insurance and for PMI to automatically terminate and/or to receive a refund of any PMI premiums that were unearned at the time of such cancellation or termination. So AmeriFirst is in breach of their own contract. 

Currently the amortisation on your website says : 1 Payment date : XX/XX/XXXX Starting Balance : {$79000.00} Principal Payment : {$430.00} Interest Payment : {$190.00} Principal to date : {$430.00} Interest to date : {$190.00} Ending balance : {$79000.00} which also indicates much has been paid off of the principal balance of the account and reflects that I have met the threshold of 80 %. 

According to the law, servicer 's, lenders, and mortgage insurers that violate the Act are liable to borrowers as follows : actual damages ( including interest accruing on such damages ) ; Statutory damages not to exceed {$2000.00} ; Costs of the action ; and Reasonable attorney fees. I have sent AmeriFirst a letter dated XX/XX/XXXX requesting PMI to be canceled. They mailed me a letter back dated XX/XX/XXXX denying me my right of PMI cancelation. I also am uploading an email of me contacting AmeriFirst regarding loosing my payments which is the only two payments that were paid late.