For loans secured by property in New York, whenever a mortgage banker or exempt organization takes points or a lock-in fee, the mortgage banker or exempt organization is required to issue a commitment in accordance with 3 NY-CCR 38.6. One requirement for this commitment, found is subsection (a)(1)(viii), is that the mortgage banker or exempt organization must disclose “whether private mortgage insurance is required (if applicable) and the conditions under which such insurance would no longer be required.”
The NY Department of Financial Services has issued a model commitment form which has the following section:
Private Mortgage Insurance: ____ Required ____ Not Required, provided the appraised value of the property results in a Loan to Value ratio of 80% or less.
On our copy of the model form, Cx5099, Docutech has decided to remove the phrase “provided the appraised value of the property results in a Loan to Value ratio of 80% or less,” for FHA, VA, and RD loans, since PMI is inapplicable for government-sponsored loans. For Conventional loans the language will continue to print. In addition, the checkboxes for the PMI will be marked based on the existence of a Mortgage Insurance Payee Name (Field 1242).
These changes will be in effect on July 31, 2018. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.