Fannie Mae (http://www.fanniemae.com) issued its private mortgage insurance cancellation guidelines on Wednesday to conform its policies to the PMI cancellation law passed by Congress last year.For mortgages originated on or after July 29, PMI policies will be automatically canceled once the homeowner's equity reaches 22% of the loan amount. In addition, Fannie Mae is adopting automatic cancellation for all existing mortgages when the loan reaches its half -life - in the 15th year of a 30-year mortgage. The new PMI law does not apply to existing mortgages, but Fannie Mae says it does not believe homeowners should "pay for private mortgage insurance that is not necessary...." Freddie Mac issued similar guidance in early May.
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