Homeowners Protection Act

The Homeowners Protection Act, enacted in 1998, is a U.S. law designed to protect homeowners from excessive private mortgage insurance (PMI) costs. It mandates that lenders automatically cancel PMI when the homeowner's mortgage balance falls to 78% of the home's original value, provided payments are timely. Homeowners can also request cancellation when their equity reaches 20%. The law aims to promote fairness and transparency, ensuring that homeowners aren't burdened by unnecessary insurance costs once they have built sufficient equity in their homes.