The VA Lock-in Agreement is provided pursuant to the provisions of 10 Va. Admin. Code §5-160-30(B). The Agreement discloses to borrowers whether private mortgage insurance (PMI) is or is not required to be paid by them in connection with their loan. To improve the quality of this disclosure, it will be modified in the following ways:
-
Currently, the “Required” and “Not Required” checkboxes are checked based on
whether the loan to value ratio is 80% or more. Because there are some lenders
who do not require PMI when such ratio is above 80%, the checkboxes will check
based on other factors, such as whether premium amounts are entered for PMI.
The text of the disclosure will continue to print for conventional loans and
will now also print for non-conventional loans; -
The text will be modified for conventional loans so that it will be as follows:
“Private Mortgage Insurance: [checkbox] Required [checkbox] Not Required, but
may be imposed in the future should certain circumstances occur, such as
delinquency of payments or the loan to value ratio increases above a certain
level.” -
For non-conventional loans (e.g. FHA, VA, or RD), the “Not Required” checkbox
will be checked all the time and the text will be modified so that it will be
as follows: “Private Mortgage Insurance: [checkbox] Required [checkbox] Not
Required (Please Note: Although Private Mortgage Insurance is not required, you
may still be required to pay premiums for government-sponsored loan
guarantees.)”
These changes will take effect on October 30, 2012. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
October 22, 2012
DR 128470