Homeowners Protection Act

DEFINITION of 'Homeowners Protection Act'

A law designed to reduce the unnecessary payment of private mortgage insurance (PMI) by homeowners who are no longer required to pay it. The Homeowners Protection Act mandates that lenders disclose certain information about PMI. The law also stipulates that PMI must be automatically terminated for homeowners who accumulate the required amount of equity in their homes.

BREAKING DOWN 'Homeowners Protection Act'

The Homeowners Protection Act covers private residential mortgages purchased after July 29, 1999. It does not apply to Veterans Affairs (VA) or Federal Housing Administration (FHA) loans and posts a new set of requirements for "high risk" mortgages. This law also institutes new requirements for loans obtained before July 29, 1999.

RELATED TERMS
  1. Private Mortgage Insurance - PMI

    A policy provided by private mortgage insurers to protect lenders ...
  2. Hope For Homeowners

    A federal aid program aimed at helping homeowners who reside ...
  3. Term Payment Plan

    An option for receiving reverse mortgage proceeds that gives ...
  4. Foreclosure - FCL

    A situation in which a homeowner is unable to make principal ...
  5. Homeowners Insurance

    A form of property insurance designed to protect an individual's ...
  6. Right Of Foreclosure

    A lender's ability to take possession of the property used to ...
Related Articles
  1. Insurance

    6 Reasons To Avoid Private Mortgage Insurance

    This costly coverage protects your mortgage lender - not you.
  2. Home & Auto

    How to Get Rid of Private Mortgage Insurance

    Private mortgage insurance benefits the lender (the sole beneficiary of PMI), but it can add a sizable chunk to your monthly house payment.
  3. Insurance

    Insurance Tips For Homeowners

    Use these simple ideas to save money and get better coverage for your house.
  4. Home & Auto

    How Does A Reverse Mortgage Work?

    A homeowner who’s at least 62 years old can use a reverse mortgage to tap into her home’s equity for money. The house serves as the loan’s collateral. The loan is repaid when the homeowner dies, ...
  5. Home & Auto

    6 Reasons To Avoid Private Mortgage Insurance

    Homebuyers who put less than 20% down will likely be forced to secure private mortgage insurance. Here are six reasons to avoid it.
  6. Home & Auto

    Mortgage Options For Underwater Homeowners

    Find out what options are available when your mortgage is greater than the value of your home.
  7. Brokers

    10 Insurance Tips For Homeowners

    Make sure you get the right home insurance coverage and compensation for your property.
  8. Home & Auto

    Understanding Private Mortgage Insurance

    Private mortgage insurance, or PMI, protects lenders against loss if a borrower defaults.
  9. Real Estate

    Best 3 Mortgage Calculator Websites with PMI

    Learn more about all of the factors behind PMI, and discover the three best websites that provide a mortgage calculator that includes PMI.
  10. Budgeting

    Buying Too Much House

    Anyone who spends more than they earn will be facing bankruptcy in no time, but there are some other ways to go flat broke.
RELATED FAQS
  1. Is it a good idea to add a reverse mortgage to your retirement strategy?

    A reverse mortgage can be a great way to increase retirement income. Does it work for everyone? What happens after a homeowner ... Read Answer >>
  2. Is homeowners' insurance required by law?

    Learn why it is always wise to protect your home with insurance even if it is not required. Understand how high-deductible ... Read Answer >>
  3. Do FHA loans have private mortgage insurance (PMI)?

    Learn in which instances PMI is required for your FHA loan. Find out when your PMI is no longer necessary and when your lender ... Read Answer >>
  4. What are the best ways to pay off my mortgage quickly?

    Learn how mortgage payments may be reduced and how to save thousands on mortgage loans by lowering the interest and principle ... Read Answer >>
  5. Why would a homebuyer need to take out PMI (private mortgage insurance)?

    Learn why some home buyers are required to take out private mortgage insurance (PMI), and how it affects the total monthly ... Read Answer >>
  6. Why do I need to pay private mortgage insurance (PMI)?

    The extra interest payments caused by private mortgage insurance may seem excessive, but there's a good reason lenders need ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center