Totally unrelated photo...  Go Blackhawks!The headline is true — Thursday has come and gone and I’ve just purchased a house…from myself.

Yep, it was just a refinance but after signing my name 40 or 50 times I’ve now officially cut my monthly minimum payment by 60%.

That’s HUGE!

(For the record, I still won’t believe this actually happened until I get a new mortgage bill in the mail…in August, apparently…)

So, anyway, among all of the stuff I had to sign, there was this one sheet that listed all of the fees to be paid to Bank of America (my now former lender) to “release” the loan.

One of the “fees” was for mortgage insurance. It was for $170.30. That works out to exactly two months worth of PMI.

How messed up is that?

It was nearly two years ago that I’d paid my mortgage balance down to the point where PMI should have been cancelled automatically.

It never happened. Countrywide — at the time — wouldn’t let it happen.

I sucked it up and continued to pay $85.15 per month for insurance that I didn’t need *and* couldn’t cancel no matter how hard I tried even after they transitioned to become part of Bank of America.

The refinance was my way out — and it appears to have worked.

But they still got the last shot in with this phantom fee…

I can only shake my head…

6 COMMENTS

  1. Congratulations on the refinance!!! 🙂

    I’ve been following your PMI saga as well since I’m in the same boat. I went ahead with the COV due to potential long term cost savings and the RE appraiser came and took 3 pictures. It was quick. I think the value will hold given comparable sales, but it’s a wait and see game now.

    If it doesn’t work out, I will end up doing what you did, which is refinancing. There is some damage in the living from the recent storms we had, so we’ll have to get it fixed before we can refinance (since I’m sure we’ll need an appraisal).

    Too bad that BOA still got a last shot with the phantom fee, but at least you’re finally RID of it once and for all (not to mention lower payments, etc). Congrats!

  2. Thanks HK!

    It ludicrous that it took a re-fi to rid myself of PMI so I hope your luck is better.

    On a “wouldn’t you figure” type of note, on Friday, BoA hit my escrow account up for June’s PMI payment. Man, I just can’t get away quick enough…

  3. Thanks for posting all this great info, Brainy.

    I too am in the exact same position with BofA (formerly Countrywide) and PMI. I am just past 20% on a traditional 30yr fixed, about 8 years into it, with one simple refi 6 years ago to lower my rate 1 point. No equity loans, no issues, no liens, no problems with the property. Made some improvements that should increase the value of the house. Been paying a bit extra each month in principle, so I’m ahead of the initial payment schedule.

    I have the same lovely letter about paying for a COV that you got from Countrywide 2 years ago. They haven’t even changed the letter, aside from the letterhead!

    It is mind-boggling that there has not been a large class-action lawsuit against BofA on this topic, since the COV has to come from Landsafe Appraisal Services, which BofA owns. Basically you have to pay the lender to reappraise the property with a new value to prove you can stop paying them insurance. How can that not be a conflict of interest for them? Of course all the appraisals will come in below market conditions. That way they get to keep collecting PMI payments. They add up to a ton of money, I am sure.

    In any event, I am considering paying the COV, as prices are good in my area (good is relative, but at least what I paid for the place).

    Does anyone know if the $130 COV charge is all I will pay, or is that some fee, and then I have to pay $400 more or so for the actual appraisal?

    Just deciding if it is worth it.

    Thanks again!
    Milo

  4. @ Milo: I’m pretty certain that paying that $130 COV would cover all of the costs. You’re spot on, though, on the conflict of interest since they’re doing it all in-house and could screw you if they wanted to.

    For me, I kinda killed two birds with one stone by going elsewhere and paying for a full blown appraisal. Sure, I finally was able to rid myself of PMI but I also cut my mortgage payment drastically and even the rate dropped over 2%. A total win-win situation for me — and at the perfect time too.

    But, really, since you’ve already refinanced once, you’re rate is probably pretty good anyway. The $130 LandSafe is probably the cheapest way to get them to stop pulling that PMI payment from your escrow account each month…

    Ugh, it’s aggravating, huh?

  5. Milo, $130 is all you have to pay for the COV. My understanding is that if the value of the COV is below the value of the loan, then 1) you’re not allowed to cancel the PMI, or 2) you can pay towards the principal if the difference isn’t substantial.

    I have Brainy Smurf and his site to thank, as it kept me on top of the PMI fight. I finally paid the $130 COV fee (estimating that the costs savings would be 10x over if I can get PMI removed and figuring that the value of my property will hold based on recent comparable sales).

    I finally heard back from BofA today, half expecting that they would tell me my property is below value. I’m happy to report that the property value held up since they approved my PMI deletion request. I no longer see the escrow in my account. Whew!

    After this saga, I would ever take any loan with PMI ever again! Too much hassles.

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