---
kind: "section"
citation: "12 U.S.C. § 4902"
title: "12"
title_heading: "Banks and Banking"
number: "4902"
heading: "Termination of private mortgage insurance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4902"
units:
  - "Chapter 49 — Homeowners Protection"
---

# §4902. Termination of private mortgage insurance

- (a) **Borrower cancellation—** A requirement for [private mortgage insurance](/usc/12/4901.md?p=13) in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15) shall be canceled on the [cancellation date](/usc/12/4901.md?p=2) or any later date that the [mortgagor](/usc/12/4901.md?p=11) fulfills all of the requirements under paragraphs [(1)](#a-1) through [(4)](#a-4), if the [mortgagor](/usc/12/4901.md?p=11)—
  - (1) submits a request in writing to the [servicer](/usc/12/4901.md?p=16) that cancellation be initiated;
  - (2) has a [good payment history](/usc/12/4901.md?p=4) with respect to the [residential mortgage](/usc/12/4901.md?p=14);
  - (3) is current on the payments required by the terms of the [residential mortgage transaction](/usc/12/4901.md?p=15); and
  - (4) has satisfied any requirement of the holder of the [mortgage](/usc/12/1707.md?p=a) (as of the date of a request under [paragraph (1)](#a-1)) for—
    - (A) evidence (of a type established in advance and made known to the [mortgagor](/usc/12/4901.md?p=11) by the [servicer](/usc/12/4901.md?p=16) promptly upon receipt of a request under [paragraph (1)](#a-1)) that the value of the property securing the [mortgage](/usc/12/1707.md?p=a) has not declined below the [original value](/usc/12/4901.md?p=12) of the property; and
    - (B) certification that the equity of the [mortgagor](/usc/12/4901.md?p=11) in the residence securing the [mortgage](/usc/12/1707.md?p=a) is unencumbered by a subordinate lien.
- (b) **Automatic termination—** A requirement for [private mortgage insurance](/usc/12/4901.md?p=13) in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15) shall terminate with respect to payments for that [mortgage insurance](/usc/12/4901.md?p=8) made by the [mortgagor](/usc/12/4901.md?p=11)—
  - (1) on the [termination date](/usc/12/4901.md?p=18) if, on that date, the [mortgagor](/usc/12/4901.md?p=11) is current on the payments required by the terms of the [residential mortgage transaction](/usc/12/4901.md?p=15); or
  - (2) if the [mortgagor](/usc/12/4901.md?p=11) is not current on the [termination date](/usc/12/4901.md?p=18), on the first day of the first month beginning after the date that the [mortgagor](/usc/12/4901.md?p=11) becomes current on the payments required by the terms of the [residential mortgage transaction](/usc/12/4901.md?p=15).
- (c) **Final termination—** If a requirement for [private mortgage insurance](/usc/12/4901.md?p=13) is not otherwise canceled or terminated in accordance with subsection [(a)](#a) or [(b)](#b), in no case may such a requirement be imposed on [residential mortgage transactions](/usc/12/4901.md?p=15) beyond the first day of the month immediately following the date that is the [midpoint of the amortization period](/usc/12/4901.md?p=7) of the loan if the [mortgagor](/usc/12/4901.md?p=11) is current on the payments required by the terms of the [mortgage](/usc/12/1707.md?p=a).
- (d) **Treatment of loan modifications—** If a [mortgagor](/usc/12/4901.md?p=11) and [mortgagee](/usc/12/4901.md?p=10) (or holder of the [mortgage](/usc/12/1707.md?p=a)) agree to a modification of the terms or conditions of a loan pursuant to a [residential mortgage transaction](/usc/12/4901.md?p=15), the [cancellation date](/usc/12/4901.md?p=2), [termination date](/usc/12/4901.md?p=18), or final termination shall be recalculated to reflect the modified terms and conditions of such loan.
- (e) **No further payments—** No payments or premiums may be required from the [mortgagor](/usc/12/4901.md?p=11) in connection with a [private mortgage insurance](/usc/12/4901.md?p=13) requirement terminated or canceled under this section—
  - (1) in the case of cancellation under [subsection (a)](#a), more than 30 days after the later of—
    - (A) the date on which a request under [subsection (a)(1)](#a-1) is received; or
    - (B) the date on which the [mortgagor](/usc/12/4901.md?p=11) satisfies any evidence and certification requirements under [subsection (a)(4)](#a-4);
  - (2) in the case of termination under [subsection (b)](#b), more than 30 days after the [termination date](/usc/12/4901.md?p=18) or the date referred to in [subsection (b)(2)](#b-2), as applicable; and
  - (3) in the case of termination under [subsection (c)](#c), more than 30 days after the final [termination date](/usc/12/4901.md?p=18) established under that subsection.
- (f) **Return of unearned premiums—**
  - (1) **In general—** Not later than 45 days after the termination or cancellation of a [private mortgage insurance](/usc/12/4901.md?p=13) requirement under this section, all unearned premiums for [private mortgage insurance](/usc/12/4901.md?p=13) shall be returned to the [mortgagor](/usc/12/4901.md?p=11) by the [servicer](/usc/12/4901.md?p=16).
  - (2) **Transfer of funds to servicer—** Not later than 30 days after notification by the [servicer](/usc/12/4901.md?p=16) of termination or cancellation of [private mortgage insurance](/usc/12/4901.md?p=13) under this chapter with respect to a [mortgagor](/usc/12/4901.md?p=11), a [mortgage insurer](/usc/12/4901.md?p=9) that is in possession of any unearned premiums of that [mortgagor](/usc/12/4901.md?p=11) shall transfer to the [servicer](/usc/12/4901.md?p=16) of the subject [mortgage](/usc/12/1707.md?p=a) an amount equal to the amount of the unearned premiums for repayment in accordance with [paragraph (1)](#f-1).
- (g) **Exceptions for high risk loans—**
  - (1) **In general—** The termination and cancellation provisions in subsections [(a)](#a) and [(b)](#b) do not apply to any [residential mortgage transaction](/usc/12/4901.md?p=15) that, at the time at which the [residential mortgage transaction](/usc/12/4901.md?p=15) is consummated, has high risks associated with the extension of the loan—
    - (A) as determined in accordance with guidelines published by the Federal National [Mortgage](/usc/12/1707.md?p=a) Association and the Federal Home Loan [Mortgage](/usc/12/1707.md?p=a) Corporation, in the case of a [mortgage](/usc/12/1707.md?p=a) loan with an original principal balance that does not exceed the applicable annual conforming loan limit for the secondary market established pursuant to [section 1454(a)(2) of this title](/usc/12/1454.md?p=a-2), so as to require the imposition or continuation of a [private mortgage insurance](/usc/12/4901.md?p=13) requirement beyond the terms specified in subsection [(a)](#a) or [(b)](#b) of this section; or
    - (B) as determined by the [mortgagee](/usc/12/4901.md?p=10) in the case of any other [mortgage](/usc/12/1707.md?p=a), except that termination shall occur—
      - (i) with respect to a [fixed rate mortgage](/usc/12/4901.md?p=3), on the date on which the principal balance of the [mortgage](/usc/12/1707.md?p=a), based solely on the [initial amortization schedule](/usc/12/4901.md?p=5) for that [mortgage](/usc/12/1707.md?p=a), and irrespective of the outstanding balance for that [mortgage](/usc/12/1707.md?p=a) on that date, is first scheduled to reach 77 percent of the [original value](/usc/12/4901.md?p=12) of the property securing the loan; and
      - (ii) with respect to an [adjustable rate mortgage](/usc/12/4901.md?p=1), on the date on which the principal balance of the [mortgage](/usc/12/1707.md?p=a), based solely on the [amortization schedule then in effect](/usc/12/4901.md?p=6) for that [mortgage](/usc/12/1707.md?p=a), and irrespective of the outstanding balance for that [mortgage](/usc/12/1707.md?p=a) on that date, is first scheduled to reach 77 percent of the [original value](/usc/12/4901.md?p=12) of the property securing the loan.
  - (2) **Termination at midpoint—** A [private mortgage insurance](/usc/12/4901.md?p=13) requirement in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15) described in [paragraph (1)](#g-1) shall terminate in accordance with [subsection (c)](#c).
  - (3) **Rule of construction—** Nothing in this subsection may be construed to require a [residential mortgage](/usc/12/4901.md?p=14) or [residential mortgage transaction](/usc/12/4901.md?p=15) described in [paragraph (1)(A)](#g-1-A) to be purchased by the Federal National [Mortgage](/usc/12/1707.md?p=a) Association or the Federal Home Loan [Mortgage](/usc/12/1707.md?p=a) Corporation.
  - (4) **GAO report—** Not later than 2 years after July 29, 1998, the Comptroller General of the United States shall submit to the Congress a report describing the volume and characteristics of [residential mortgages](/usc/12/4901.md?p=14) and [residential mortgage transactions](/usc/12/4901.md?p=15) that, pursuant to paragraph (1) of this subsection, are exempt from the application of subsections [(a)](#a) and [(b)](#b). The report shall—
    - (A) determine the number or volume of such [mortgages](/usc/12/1707.md?p=a) and transactions compared to [residential mortgages](/usc/12/4901.md?p=14) and [residential mortgage transactions](/usc/12/4901.md?p=15) that are not classified as high-risk for purposes of [paragraph (1)](#g-1); and
    - (B) identify the characteristics of such [mortgages](/usc/12/1707.md?p=a) and transactions that result in their classification (for purposes of [paragraph (1)](#g-1)) as having high risks associated with the extension of the loan and describe such characteristics, including—
      - (i) the income levels and races of the [mortgagors](/usc/12/4901.md?p=11) involved;
      - (ii) the amount of the downpayments involved and the downpayments expressed as percentages of the acquisition costs of the properties involved;
      - (iii) the types and locations of the properties involved;
      - (iv) the [mortgage](/usc/12/1707.md?p=a) principal amounts; and
      - (v) any other characteristics of such [mortgages](/usc/12/1707.md?p=a) and transactions that may contribute to their classification as high risk for purposes of [paragraph (1)](#g-1), including whether such [mortgages](/usc/12/1707.md?p=a) are purchase-money [mortgages](/usc/12/1707.md?p=a) or refinancings and whether and to what extent such loans are low-documentation loans.
- (h) **Accrued obligation for premium payments—** The cancellation or termination under this section of the [private mortgage insurance](/usc/12/4901.md?p=13) of a [mortgagor](/usc/12/4901.md?p=11) shall not affect the rights of any [mortgagee](/usc/12/4901.md?p=10), [servicer](/usc/12/4901.md?p=16), or [mortgage insurer](/usc/12/4901.md?p=9) to enforce any obligation of such [mortgagor](/usc/12/4901.md?p=11) for premium payments accrued prior to the date on which such cancellation or termination occurred.

## Source credit

(Pub. L. 105–216, § 3, July 29, 1998, 112 Stat. 899; Pub. L. 106–569, title IV, §§ 402(a)(2), (c)(1), 403(a), 404, 405(b), (c), Dec. 27, 2000, 114 Stat. 2956–2958.)

## Notes

### Editorial Notes

### Amendments

2000—Subsec. (a). Pub. L. 106–569, § 404(1)(A), inserted “or any later date that the mortgagor fulfills all of the requirements under paragraphs (1) through (4)” after “cancellation date” in introductory provisions.

Subsec. (a)(3), (4). Pub. L. 106–569, § 404(1)(B)–(D), added par. (3) and redesignated former par. (3) as (4).

Subsec. (b)(2). Pub. L. 106–569, § 405(b), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “on the date after the termination date on which the mortgagor becomes current on the payments required by the terms of the residential mortgage transaction.”

Subsec. (c). Pub. L. 106–569, § 403(a)(1), inserted “on residential mortgage transactions” after “requirement be imposed”.

Subsec. (d). Pub. L. 106–569, § 402(c)(1)(B), added subsec. (d). Former subsec. (d) redesignated (e).

Subsec. (e). Pub. L. 106–569, § 402(c)(1)(A), redesignated subsec. (d) as (e). Former subsec. (e) redesignated (f).

Subsec. (e)(1)(B). Pub. L. 106–569, § 404(2), substituted “subsection (a)(4)” for “subsection (a)(3)”.

Subsec. (f). Pub. L. 106–569, § 402(c)(1)(A), redesignated subsec. (e) as (f). Former subsec. (f) redesignated (g).

Subsec. (f)(1)(B)(ii). Pub. L. 106–569, § 402(a)(2), substituted “the amortization schedule then in effect” for “amortization schedules”.

Subsec. (g). Pub. L. 106–569, § 402(c)(1)(A), redesignated subsec. (f) as (g).

Subsec. (g)(1). Pub. L. 106–569, § 403(a)(2)(A), struck out “mortgage or” after “do not apply to any residential” in introductory provisions.

Subsec. (g)(2). Pub. L. 106–569, § 403(a)(2)(B), struck out “mortgage or” after “in connection with a residential”.

Subsec. (g)(3). Pub. L. 106–569, § 403(a)(2)(C), substituted “residential mortgage or residential” for “mortgage or”.

Subsec. (h). Pub. L. 106–569, § 405(c), added subsec. (h).

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective 1 year after July 29, 1998, see section 13 of Pub. L. 105–216, set out as a note under section 4901 of this title.