An Act to Require the Termination of Private Mortgage Insurance
Maine Legislature, Session 131, LD 1080
Committee: Health Coverage, Insurance and Financial Services
Sponsors: POULIOT, COLLINGS, BRENNER, DAUGHTRY, LIBBY, VITELLI
Amends: 33 MRSA §507-A

Legislative Document
No. 1080
S.P. 449
In Senate, March 9, 2023
An Act to Require the Termination of Private Mortgage Insurance
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator POULIOT of Kennebec.
Cosponsored by Representative COLLINGS of Portland and
Senators: BRENNER of Cumberland, DAUGHTRY of Cumberland, LIBBY of Cumberland, 
VITELLI of Sagadahoc.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  33 MRSA §507-A is enacted to read:
§507-A.  Private mortgage insurance in residential mortgage transactions
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Actual value" means, with respect to a residential mortgage transaction, the 
contemporaneous value of the property securing the mortgage as determined by an 
automated valuation model.
B.  "Automated valuation model" means a computerized model used to determine the 
value of property securing a residential mortgage transaction that complies with Title 
XI, Section 1125 of the federal Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989, as in effect on January 1, 2023, 12 United States Code, 
Section 3354, and with regulations adopted pursuant to that section, if any.
C.  "Private mortgage insurance" has the same meaning as in the federal Homeowners 
Protection Act of 1998, as in effect on January 1, 2023, 12 United States Code, Section 
4901(13).
D.  "Residential mortgage transaction" means a transaction in which a mortgage, deed 
of trust, purchase money security interest arising under an installment contract or 
equivalent consensual security interest is created or retained against a single-family 
dwelling that is the principal residence of the mortgagor to finance the acquisition, 
initial construction or refinancing of that dwelling.
2. Automatic termination.  Private mortgage insurance in connection with a 
residential mortgage transaction automatically terminates on the date that the outstanding 
balance of the mortgage first reaches 80% or less of the actual value of the property 
securing the mortgage or at the end of the 24th month following the date of the transaction, 
whichever occurs earlier.
3. Prohibited provisions.  A mortgagee in a residential mortgage transaction may not 
require the mortgagor to carry private mortgage insurance beyond the date of automatic 
termination specified in subsection 2 or precondition the termination of private mortgage 
insurance on or after the date of automatic termination specified in subsection 2 upon the 
mortgagor's making of a request for termination.
Sec. 2.  Application.  This Act applies to private mortgage insurance created or 
renewed on or after the effective date of this Act and to residential mortgage transactions 
entered into on or after the effective date of this Act.
SUMMARY
This bill provides that private mortgage insurance in connection with a residential 
mortgage transaction automatically terminates on the date that the outstanding balance of 
the mortgage first reaches 80% or less of the actual value of the property securing the 
mortgage, as determined by an automated valuation model, or 2 years after the date of the 
transaction, whichever occurs first.  The bill defines "private mortgage insurance" and 
"residential mortgage transaction" in a manner that is consistent with the definitions of 
these terms in the federal Homeowners Protection Act of 1998, as amended, which are 
currently codified in 12 United States Code, Section 4901.  It also defines "automated 
valuation model" as a computerized model used to determine the value of property securing 
a residential mortgage transaction that complies with the requirements of Title XI, Section 
1125 of the federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989, 
which is currently codified in 12 United States Code, Section 3354.