Mortgage Insurance

What is the name of your state? Texas
We purchased a new construction home in May 1999. We used the services of a mortgage broker and during the transaction they offered us a mortgage insurance deal where we prepaid the premium in the amount of $4129.00 to avoid monthly payments. We just sold the same home on 6/25/02. The mortgage company is now telling us that the unearned portion of the mortgage insurance premium is non-refundable because the policy would have had to be cancelled within the first 24 months for any of the premium to be refundable. This was never disclosed to us during closing, and I reviewed all of the closing documents including the mortgage insurance disclosure statments and this information is not printed anywhere. Can they do this? This seems an afully easy way to get money they didn't earn.

[HomeGuru]

Sorry, I would have to review the documentation that you have concerning this issue to be able to assist you.
Please have an attorney review your case.
It would appear to me that there should be something in writing to evidence that the lender is entitled to keep and not refund the prepaid mortgage insurance.

[JETX]

And what was their response when you wrote them a real nice letter (certified RRR) and asked them to show you where this 'no refund' is shown in your paperwork??

They sent me a copy of the policy they purchased from the mortgage insurance company. It states on the policy that it is a limited refund policy and that it has to be cancelled within the first 24 months of initiation to receive any refund of the premium. I understand that the policy is what they say it is, I just thought they should have disclosed that to us as there are other types of policies available, as we have just learned, that would have enabled us to receive a refund. I just wanted to know if they legally could have purchased that type of policy with those stipulations without disclosing that to us prior to the purchase of the policy. Any help with this is greatly appreciated.

[HomeGuru]

I understand your situation but things get really technical as far as disclosure in a mortgage loan transaction.
Have your attorney check to see if there was a violation of the Truth-in-Lending Act or other law.