If a bank pays the pmi premiums on behalf of the borrower, the Homeowners Protection Act requires written notice to be given to the borrower not later than the date a loan commitment is made. Notice needs to state(1) that lender paid MI differs from borrower paid MI, in that lender paid MI may not be cancelled by the mortgagor, while borrower paid MI could be cancellable by the mortgagor, and could automatically terminate on the termination date; (2) that lender paid MI usually results in a residential mortgage having a higher interest rate than it would in the case of borrower paid MI; and that it terminates only when the residential mortgage is refinanced, paid off, or otherwise terminated; (3) that lender paid MI and borrower paid MI both have benefits and disadvantages, including a generic analysis of the differing costs and benefits of a residential mortgage in the case of lender paid MI vs borrower paid MI over a 10 year period, assuming prevailing interest and property appreciation rates; and (4) that lender paid MI may be tax-deductible for purposes of Federal income taxes, if the mortgagor itemizes expenses for that purpose.

Does anyone have a "generic" analysis they have used to comply with item #3, or any sample language that is available anywhere?

I am also confused about what is meant by item #4. Does this mean the bank needs to disclose the amount of pmi premiums it has paid on behalf of the borrower?

This is a follow up to my earlier post. Does anyone have any information on this? Any guidance on this would be appreciated.

With substantial "Googling", I was able to locate a couple of sample LPMI forms, and a couple of consumer friendly sites to help consumers analyze the costs/benefits. PM me if you'd like faxes of the sample forms.

Other LPMI questions - does the cost, or interest rate difference, need to be shown on the HUD-1? If so, how?

Does anyone have a sample form for the notice that LPMI customers should receive around the time they could have eliminated BPMI had they chosen that option? (per 12 USC 4905(c)(2))