New Law Offers Break For Homeowners Overburdened With Private Mortgage Insurance, Says CCH>

(RIVERWOODS, ILL., June 24, 1999) – A new law promises to provide some relief for mortgage holders. Starting in July, homeowners won’t be forced to maintain private mortgage insurance (PMI) for the life of their loans, according to CCH INCORPORATED, a leading provider of banking, securities and financial law information.

The insurance is usually required when homebuyers make a down payment of less than 20 percent on their homes. CCH points out that effective July 29, 1999, borrowers with good payment histories will have the right to cancel their PMI when their principal balance falls to 80 percent of the original value of their property. What’s more, the Homeowners Protection Act of 1998 says lenders will be required to terminate PMI when the principal balance hits 78 percent. The provisions apply only to new mortgages made after the effective date of the Act, CCH noted.

According to Ken Benson, J.D., banking law analyst with CCH Federal Banking Reports, lenders must supply homeowners with annual notices of their cancellation and termination rights. The notice must indicate when, under the amortization schedule for the loan, the 80 percent point will be reached.

"Homeowners who are running ahead of the amortization schedule because of extra principal payments can request cancellation when their actual principal balance reaches 80 percent," Benson added.

To qualify for early cancellation, however, CCH says buyers must have a good payment history, meaning that no payments were more than 60 days late during the two years before the cancellation date and no payments were more than 30 days late during the year prior to cancellation. The automatic termination is also deferred for borrowers who have fallen behind in their payments.

About CCH INCORPORATED

CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served four generations of business professionals and their clients. The company produces more than 700 electronic and print products for the tax, legal, banking, securities, human resources, healthcare and small business markets. CCH is a wholly owned subsidiary of Wolters Kluwer U.S. The CCH web site can be accessed at www.cch.com.

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