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…

I’m in shock that I didn’t blog about it then. Perhaps I did, but I couldn’t find any mention of it…

And, honestly, I wasn’t going to blog about it this year either until reader Doug Hill posted a comment on one of my better entries regarding my PMI battle with Countrywide — the one I eventually gave up on.

See, last year there was a “new” deduction that homeowners could take. You could deduct your PMI!

How about that?

I was pretty pumped — until TurboTax told me that I didn’t qualify for the deduction.

It didn’t indicate why, so I just assumed that it was because I was too awesome, um, that it was because my income was too high. You know, something positive.

But this year, the same thing happened and I made a lot less. For a minute or so, I got all excited when it allowed me to enter that I’d paid $1021.80 for PMI in 2008, you know, thinking that I’d get most of it back from Uncle Sam.

No dice. I don’t qualify. Still.

So, modified slightly, here’s what Doug Hill said to get me all fired up:

Only those that took out a loan after 1-1-07 can deduct the cost of PMI through 12-31-10.

I took my loan out in August 2005…

Look up P.L. 110-142. Newest version of section 3 (b) doesn’t say anything about when you took out a loan; but IRS Code Section 163 Section H (iii) says the loan must be after 1-1-07.

Now we have two classes of homeowners who pay PMI — Deductible and Non-Deductible.

He’s right.

Like Doug, I’m getting hosed because I bought my house before the market started to falter. As MoneyMateKate so eloquently stated in another post, “No good fiscally responsible deed goes unpunished these days. Grrr.”

Grr is right.

Once again, it feels like I’m getting the shaft for making a wise move and paying my mortgage bill on time and in full for all of these years… while the people who are walking away from their mortgages because they bit off more than they could chew could potentially be “bailed” out…by the taxes I’m paying.

In last month’s net worth update, I briefly hinted at the fact that I was throwing in the towel for now…

I cast out one last line earlier this month to Countrywide when they completed my annual escrow analysis for my attached escrow account (which, in part, pays the PMI premium each month) and was greeted with the same response I’ve been receiving since July.

“Send us a check for $130, take a day off from work, and maybe we’ll drop it, but probably not. The current market conditions aren’t favorable, you know…”

So, for the time being, and likely the entire year of 2009, I’m just going to swallow my pride and continue to be ripped off because I’ve come to the conclusion that this is a battle I can’t win — there are just too many loopholes and specific conditions available in the law for them to fall back on to justify taking this money from me.

Yep, I’ve met all of the commonly mentioned benchmarks; the 22% equity being the most often referenced as a mark resulting in automatic termination.

But there are little sneaky things in there like termination, automatic or not, never happening until reaching the mid-point of the original amortization schedule.

Yeah — like 9 years from now…

In my instance, that’s another $9200 in PMI payments.

And, even then, there are ways for Countrywide to continue to hit me up for an extra monthly fee.

Aggravating is the only word I can think of to describe it.

Seems my only hope is to re-finance and, right now, I’m not ready to make a move like that.

I’m not really sure why I say that, it could just be laziness — it probably is, but for whatever reason, I’m just not comfortable making that move right now…

You know, with “market conditions” being what they are…         ;0)

It’s labeled “Information Systems – U.S. House of Representatives”.

Interesting.

Now I’m sure some out there think I’m going to say something about how I’m horrified that some government employee is wasting our tax dollars surfing websites like Pants in a Can on the clock, you know, using government time and equipment for, well, less than official things but I’m not going there…

Government waste, oddly enough, doesn’t bother me too much.

Looking into it further, their landing page on the site was my post from July 15 titled, “FTC Bait? My Own Mortgage Crisis…”

That had me thinking, hey, cool, maybe the whole PMI/Countrywide dilemma I find myself in is getting a little attention in Washington! Sweet! This could be a good thing…

But then I went another step further and looked up the search terms they used to stumble across my site…

“definition of mortgage insurance, ftc”

Ouch.

I dunno, maybe it’s just me, but you think they’d have access internally to, um, more official sources of reference…

But I can’t say that I’m not flattered that they clicked through to my site.

And I also feel the need to say that I’m thrilled that someone in Washington DC is looking this type of thing up.

Though the media would have you think otherwise of late, mortgage company disputes don’t begin and end with foreclosures…

I’m not looking for a bailout; I just don’t want to be ripped off (any more)…

Sorry, here I go again…

So, tonight, moments ago actually, they responded to my inquiry from September 10th.

Back then, I asked two questions:

1. Does Countrywide acknowledge the Homeowners Protection Act in regards to the automatic cancellation of PMI?

2. At what point will the PMI on my account be automatically cancelled? I’d like a specific date please.

They responded tonight:

Posted 09/22/2008

Reply : Dear Brainy Smurf:

Once again, thank you for your recent Internet inquiry addressed to Customer Service.

Our initial research shows that we can best resolve this inquiry for you by speaking to you in person. To ensure that we fully resolve your concern, we ask that you contact the PMI Department directly at (800) 669-9092.

Thank you for communicating with us electronically; we appreciate the opportunity to be of assistance.

Brilliant! Almost word-for-word, the same response I received last month.

Remember what happened the last time they asked me to speak with them in person?

Yeah, they had no idea why I was calling even though I had a direct line and a name to speak to. Hmph!

They truly have me going in circles.

I’m really tempted to send them a 2-letter response.

“FU”

If you want to be acknowledged, you *need* to ask twice. Yes, twice.

That said, they still probably won’t answer your question.

It’s kinda funny, in an infuriating sort of way, because they actually responded to my original inquiry from August 30 — but only after I sent it a second time, well, yesterday.

To me, that means that they were just sitting on it hoping my problem would just go away.

What’s up with that? Last time I checked, that’s not customer service.

To recap quickly (there’s a lot of back story to this whole saga that you can find here, if you’re interested), here’s what I submitted:

Hello, I’ve called customer service twice and spoken to three people this week, all of which have been unable to answer my questions:

1. Does Countrywide acknowledge the Homeowners Protection Act in regards to the automatic cancellation of PMI?

2. At what point will the PMI on my account be automatically cancelled? I’d like a specific date please.

Please answer these two questions for me.

Pretty simple, right? Two questions.

Just looking for a yes or no and a date. That’s it.

I’m not asking “why” or anything that requires a long drawn out response.

This is how they responded:

Dear Brainy Smurf

Thank you for your recent Internet inquiry addressed to the Customer Service Department.

Please be advised that on August 27, 2008. A request to have the PMI requirements reviewed was submitted to our Mortgage Insurance Deletion Department. Once the research is completed a letter will be mailed to you advising of the outcome. This may take up to ten business days.

Thank you for communicating with us electronically; we appreciate the opportunity to be of assistance.

No way! Are you kidding me?

They’re going to send me another one of those letters that I’ve already got 4, maybe 5, copies of already. I’m thrilled. I mean, that’s exactly what I asked for, right? A letter. A letter asking me to send them $130.

No, wait a minute… That isn’t what I asked for…

A letter asking me to send Countrywide $130 doesn’t answer either of my questions.

In fact, it doesn’t relate to the automatic cancellation of PMI or the Homeowners Protection Act at all.

So basically, 5 letters, 10 back-and-forth customer service submissions, and a few phone calls later, I’m pretty much in the same place that I was back on July 15.

That is, of course, if you omit the fact that I’ve been robbed of $85.15 for the past 3 months too…

Thanks Countrywide, you know, for giving me the runaround for the past 60 days…

Seems history repeats itself.

It’s been 10 days since my last submission. They claim on the website that it may take 1-2 days to respond.

Obviously, they’re late.

With that, I’ve just submitted my last inquiry again:

Hello, I’ve called customer service twice and spoken to three people this past week, all of which have been unable to answer my questions:

1. Does Countrywide acknowledge the Homeowners Protection Act in regards to the automatic cancellation of PMI?

2. At what point will the PMI on my account be automatically cancelled? I’d like a specific date please.

Please answer these two questions for me.

Now to sit and wait some more…

He wished to highlight the very last part of Section 2 which defines “termination date”:

(16) TERMINATION DATE.–The term “termination date”
means–
(A) with respect to a fixed rate mortgage, the date on which the principal balance of the mortgage, based solely on the initial amortization schedule for that mortgage, and irrespective of the outstanding balance for that mortgage on that date, is first scheduled to reach 78 percent of the original value of the property securing the loan; and

(B) with respect to an adjustable rate mortgage, the date on which the principal balance of the mortgage, based solely on amortization schedules for that mortgage, and irrespective of the outstanding balance for that mortgage on that date, is first scheduled to reach 78 percent of the original value of the property securing the loan.

In Butch’s words, it’s “as though the FTC website is missing a crucial tidbit.”

You know what?

He’s right.

The FTC’s “Alert” curiously omits any reference to paragraph 16A or 16B of Section 2.

They simply state:

If you put less than 20 percent down on a home mortgage, lenders often require you to have Private Mortgage Insurance (PMI). PMI protects the lender if you default on the loan. The Homeowners Protection Act of 1998 – which became effective in 1999 – establishes rules for automatic termination and borrower cancellation of PMI on home mortgages. These protections apply to certain home mortgages signed on or after July 29, 1999 for the purchase, initial construction, or refinance of a single-family home. These protections do not apply to government-insured FHA or VA loans or to loans with lender-paid PMI.

For home mortgages signed on or after July 29, 1999, your PMI must – with certain exceptions – be terminated automatically when you reach 22 percent equity in your home based on the original property value, if your mortgage payments are current. Your PMI also can be canceled, when you request – with certain exceptions – when you reach 20 percent equity in your home based on the original property value, if your mortgage payments are current.

One exception is if your loan is “high-risk.” Another is if you have not been current on your payments within the year prior to the time for termination or cancellation. A third is if you have other liens on your property. For these loans, your PMI may continue. Ask your lender or mortgage servicer (a company that collects your payments) for more information about these requirements.

This “crucial tidbit” must have fallen under their “certain exceptions” or something… In my opinion, it shouldn’t have.

Anyway, I was aware of this section of the law. Before I even called Countrywide, I wanted to make sure I wasn’t missing anything.

Hard to believe, but I did actually read all 15 pages — though much of it does not apply to my situation.

I was even prepared for Countrywide to respond with something very similar, half expecting them to, but they didn’t.

That’s why I, again, resorted to Jedi mind tricks with my last online request.

Okay, maybe I didn’t use any Jedi mind tricks, but I definitely opened the door for them.

At what point will the PMI on my account be automatically cancelled? I’d like a specific date please.

I mean, could I have given them a better set-up?

Still no response.

But if they do come back and plainly say, “July of 2010″ or something, I’ll put this issue to rest.

I won’t be happy but at least I’ll know where they got their answer.

As of right now, they don’t have an answer at all…

(And it also makes you wonder how so many people got their PMI dropped just by using the appreciation of their home rather than the size of their mortgage payments. There are all kinds of articles out there on the net from 2006 or so about that. If PMI isn’t supposed to drop until the amortization schedule says it is, well, what’s up with that?)

Hello, I’ve called customer service twice and spoken to three people this past week, all of which have been unable to answer my questions:

1. Does Countrywide acknowledge the Homeowners Protection Act in regards to the automatic cancellation of PMI.

2. At what point will the PMI on my account be automatically cancelled. I’d like a specific date please.

Please answer these two questions for me.

Not holding my breath on the response to this one.

By the way, thanks for all of the emails of encouragement over the past couple of weeks!

Does Countrywide acknowledge the existence of Homeowners Protection Act?

From what I can tell, no.

Does a scenario exist where PMI is automatically terminated?

Again, it doesn’t appear so.

Had yesterday’s conversation gone differently, even with the same negative result, I think I’d still consider myself a satisfied customer.

Unhappy, but satisfied.

I mean, had she said something along the lines of, “Yes, Mr. Smurf, you have indeed reached the required loan to value percentage, but PMI will continue until the date that your original amortization schedule would have had you reaching that percentage. By the way, would you like to discuss refinancing options?”

Yeah, that’s still a BS response, and still a rip-off, but at least it would have been some solid information. All I have now is a bunch of jumbled worlds — COV, market conditions, however, and Smorf…

This morning I’m going to try the online customer service method again asking bluntly, “Is Countrywide aware of a law called the Homeowners Protection Act?” and “At what date will my PMI be terminated automatically.”

I’ll also ask them not to send my another letter in 7-10 days. And I’ll also ask that that they not ask me to call customer service again. I’ve spoken to three people and no one has answered my question.