12 U.S.C. §4901 — Homeowners Protection Act: Definitions

hpa-12usc-4901

HPA statutory definitions section (chapter 49). Establishes controlling terms used throughout HPA: adjustable rate mortgage, cancellation date (80% LTV), good payment history, mortgage insurance, mortgagee, mortgagor, original value, residential mortgage transaction, servicer, single-family dwelling, and termination date (78% LTV).

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source:
  type: regulation
  id: hpa-12usc-4901
  authority: '12 U.S.C. §4901 — Homeowners Protection Act: Definitions'
  description: |
    HPA statutory definitions section (chapter 49). Establishes
    controlling terms used throughout HPA: adjustable rate mortgage,
    cancellation date (80% LTV), good payment history, mortgage
    insurance, mortgagee, mortgagor, original value, residential
    mortgage transaction, servicer, single-family dwelling, and
    termination date (78% LTV).
obligations:
  - id: hpa-12usc-4901-2-cancellation-date-definition
    canonical_id: hpa-12usc-4901-2-cancellation-date-definition
    section: 12 U.S.C. §4901(2) — Cancellation date definition (80% LTV trigger)
    description: |
      [LENDER] must apply the §4901(2) statutory definition of
      "cancellation date" when administering PMI cancellation. For a
      fixed-rate mortgage, cancellation date is the date on which the
      principal balance, based solely on the initial amortization
      schedule (irrespective of outstanding balance), is first scheduled
      to reach 80 percent of the original value; or, based solely on
      actual payments, reaches 80 percent of original value. For an
      adjustable-rate mortgage the same 80-percent rule applies using
      the amortization schedule then in effect. [LENDER] must use this
      definition (not a self-defined LTV trigger) when honoring a
      borrower's §4902(a) cancellation request.
    type: do
    audit_question: For every PMI cancellation request [LENDER] processes under §4902(a), can [LENDER] evidence that the cancellation date was computed using the §4901(2) statutory definition — i.e., the date the principal balance first reaches 80 percent of original value based on the initial amortization schedule (fixed-rate) or amortization schedule then in effect (ARM), or based on actual payments?
    program_review: Do the P&Ps ensure the §4901(2) statutory cancellation date is used — the date the principal balance first reaches 80% of original value based solely on the initial amortization schedule (fixed-rate) or amortization schedule then in effect (ARM), or based on actual payments — rather than a self-defined LTV trigger?
    file_review: For sampled §4902(a) cancellations, confirm the cancellation date was computed under the §4901(2) definition (initial/then-in-effect amortization schedule or actual payments).
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: compliance_officer
    secondary_owner_role: escrow_analyst
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hpa
      - pmi
      - definitions
      - cancellation-date
      - servicing
      - promoted
    primary_source:
      tier: 1
      authority: 12 U.S.C. §4901(2)
      source_class: hpa-statute
      source_url: https://www.law.cornell.edu/uscode/text/12/4901
      snapshot_id: d01dd576b43f979f
      fetched_at: '2026-05-24T00:46:51Z'
      content_hash: sha256:71b58d4c6d951e47af8896325d489f11e556dfb00f6591127930f66404eddab3
      paragraph_quote: based solely on the initial amortization schedule for that mortgage, and irrespective of the outstanding balance for that mortgage on that date, is first scheduled to reach 80 percent of the original value of the property securing the loan; or
      drafter_attestation: |
        Copied verbatim from snapshot d01dd576b43f979f (content.txt) at
        2026-05-23T01:00Z. Substring is the §4901(2)(A)(i) operative
        80-percent-original-value rule; the (A)(ii) actual-payments
        alternative and (B) ARM analog are paraphrased in description.
    promoted_at: '2026-05-24T00:54:39+00:00'
    promoted_from: hpa-12usc-4901-roundb-v1.yaml
  - id: hpa-12usc-4901-4-good-payment-history-definition
    canonical_id: hpa-12usc-4901-4-good-payment-history-definition
    section: 12 U.S.C. §4901(4) — Good payment history definition (60/30 day rule)
    description: |
      [LENDER] must apply the §4901(4) statutory definition of
      "good payment history" when evaluating a borrower's §4902(a)
      PMI cancellation request. The mortgagor must not have made a
      payment 60 or more days past due during the 12-month period
      beginning 24 months before the later of (i) the date the
      mortgage reaches the cancellation date or (ii) the date the
      mortgagor submits the cancellation request; AND must not have
      made a payment 30 or more days past due during the 12-month
      period preceding the later of those same two dates.
    type: do
    audit_question: For every PMI cancellation request [LENDER] denies under §4902(a)(2) for lack of good payment history, can [LENDER] evidence that the determination tracks the §4901(4) two-window test — no 60+ day delinquency in months 13-24 before cancellation/request date, AND no 30+ day delinquency in the 12 months preceding cancellation/request date?
    program_review: Do the P&Ps ensure the §4901(4) good-payment-history test is applied to §4902(a) cancellation requests — no 60+-day-late payment in the 12-month window beginning 24 months before the later of cancellation-date or request-date, AND no 30+-day-late payment in the 12 months preceding that later date?
    file_review: For §4902(a) requests denied for payment history, confirm the determination tracked the §4901(4) two-window test exactly.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: compliance_officer
    secondary_owner_role: escrow_analyst
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hpa
      - pmi
      - definitions
      - good-payment-history
      - servicing
      - promoted
    primary_source:
      tier: 1
      authority: 12 U.S.C. §4901(4)
      source_class: hpa-statute
      source_url: https://www.law.cornell.edu/uscode/text/12/4901
      snapshot_id: d01dd576b43f979f
      fetched_at: '2026-05-24T00:46:51Z'
      content_hash: sha256:71b58d4c6d951e47af8896325d489f11e556dfb00f6591127930f66404eddab3
      paragraph_quote: made a mortgage payment that was 60 days or longer past due during the 12-month period beginning 24 months before the later of (i) the date on which the mortgage reaches the cancellation date , or (ii) the date that the mortgagor submits a request for cancellation under section 4902(a)(1) of this title ; or
      drafter_attestation: |
        Copied verbatim from snapshot d01dd576b43f979f (content.txt) at
        2026-05-23T01:00Z. Substring is the §4901(4)(A) operative 60-day
        window; the (B) 30-day window is paraphrased in description.
    promoted_at: '2026-05-24T00:54:39+00:00'
    promoted_from: hpa-12usc-4901-roundb-v1.yaml
  - id: hpa-12usc-4901-18-termination-date-definition
    canonical_id: hpa-12usc-4901-18-termination-date-definition
    section: 12 U.S.C. §4901(18) — Termination date definition (78% LTV trigger)
    description: |
      [LENDER] must apply the §4901(18) statutory definition of
      "termination date" when administering automatic PMI termination
      under §4902(b). For a fixed-rate mortgage, termination date is
      the date the principal balance, based solely on the initial
      amortization schedule (irrespective of outstanding balance), is
      first scheduled to reach 78 percent of original value. For an
      adjustable-rate mortgage the same 78-percent rule applies using
      the amortization schedule then in effect. The 78 percent rule
      is a scheduled-balance trigger — borrower payment history is
      irrelevant to identifying the termination date (but governs
      when termination is given effect under §4902(b)(2)).
    type: do
    audit_question: For every loan [LENDER] services with PMI, can [LENDER] evidence that the §4901(18) termination date was computed at consummation as the scheduled date the principal balance first reaches 78 percent of original value (per initial amortization schedule for fixed-rate, amortization schedule then in effect for ARM), and that termination was applied on that date when the borrower was current per §4902(b)(1)?
    program_review: Do the P&Ps ensure the §4901(18) termination date is computed at consummation as the scheduled date the principal balance first reaches 78% of original value (initial amortization schedule for fixed-rate; schedule then in effect for ARM), independent of borrower payment history?
    file_review: For sampled PMI loans, confirm the §4901(18) termination date was computed at consummation per the scheduled-balance rule.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: escrow_analyst
    secondary_owner_role: default_servicing_analyst
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hpa
      - pmi
      - definitions
      - termination-date
      - servicing
      - promoted
    primary_source:
      tier: 1
      authority: 12 U.S.C. §4901(18)
      source_class: hpa-statute
      source_url: https://www.law.cornell.edu/uscode/text/12/4901
      snapshot_id: d01dd576b43f979f
      fetched_at: '2026-05-24T00:46:51Z'
      content_hash: sha256:71b58d4c6d951e47af8896325d489f11e556dfb00f6591127930f66404eddab3
      paragraph_quote: with respect to a fixed rate mortgage , the date on which the principal balance of the mortgage, based solely on the initial amortization schedule for that mortgage, and irrespective of the outstanding balance for that mortgage on that date, is first scheduled to reach 78 percent of the original value of the property securing the loan; and
      drafter_attestation: |
        Copied verbatim from snapshot d01dd576b43f979f (content.txt) at
        2026-05-23T01:00Z. Substring is the §4901(18)(A) operative
        fixed-rate 78-percent-original-value rule; the (B) ARM analog
        is paraphrased in description.
    promoted_at: '2026-05-24T00:54:39+00:00'
    promoted_from: hpa-12usc-4901-roundb-v1.yaml
  - id: hpa-12usc-4901-12-original-value-definition
    canonical_id: hpa-12usc-4901-12-original-value-definition
    section: 12 U.S.C. §4901(12) — Original value definition
    description: |
      [LENDER] must compute "original value" for PMI cancellation
      and termination thresholds (80% / 78% / 77%) using the §4901(12)
      statutory rule: for a purchase money transaction, the lesser of
      the contract sales price OR the appraised value at consummation;
      for a refinance of the mortgagor's principal residence, only the
      appraised value relied upon by the mortgagee to approve the
      refinance. [LENDER] may not substitute current-market value or
      a later appraisal for "original value" when applying the §4902
      cancellation or termination triggers.
    type: do
    audit_question: For every PMI cancellation or termination determination [LENDER] makes under §4902, can [LENDER] evidence that "original value" was computed under §4901(12) as the lesser of contract sales price or consummation appraised value (purchase) OR as the appraised value relied upon at refinance approval (refinance), and that no later valuation was substituted when applying the 80%/78% trigger?
    program_review: Do the P&Ps ensure 'original value' for the 80%/78%/77% thresholds is computed under §4901(12) — lesser of contract sales price or consummation appraised value (purchase), or only the appraised value relied upon at refinance approval (refinance) — with no later/current valuation substituted?
    file_review: For sampled §4902 determinations, confirm 'original value' used the §4901(12) rule and that no later valuation was substituted when applying the trigger.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: compliance_officer
    secondary_owner_role: escrow_analyst
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hpa
      - pmi
      - definitions
      - original-value
      - servicing
      - promoted
    primary_source:
      tier: 1
      authority: 12 U.S.C. §4901(12)
      source_class: hpa-statute
      source_url: https://www.law.cornell.edu/uscode/text/12/4901
      snapshot_id: d01dd576b43f979f
      fetched_at: '2026-05-24T00:46:51Z'
      content_hash: sha256:71b58d4c6d951e47af8896325d489f11e556dfb00f6591127930f66404eddab3
      paragraph_quote: The term “ original value ”, with respect to a residential mortgage transaction , means the lesser of the sales price of the property securing the mortgage, as reflected in the contract, or the appraised value at the time at which the subject residential mortgage transaction was consummated. In the case of a residential mortgage transaction for refinancing the principal residence of the mortgagor, such term means only the appraised value relied upon by the mortgagee to approve the refinance transaction.
      drafter_attestation: |
        Copied verbatim from snapshot d01dd576b43f979f (content.txt) at
        2026-05-23T01:00Z. Substring is the full §4901(12) definition of
        original value; no paraphrasing.
    promoted_at: '2026-05-24T00:54:39+00:00'
    promoted_from: hpa-12usc-4901-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-24T00:54:39+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\hpa-12usc-4901-roundb-v1.yaml
    candidates_promoted: 4
    candidates_skipped_existing: 0

Verbatim regulatory text (4)

Verbatim provisions from 12 U.S.C. §4901 — Homeowners Protection Act: Definitions — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

12 U.S.C. §4901(2) — Cancellation date definition (80% LTV trigger)

based solely on the initial amortization schedule for that mortgage, and irrespective of the outstanding balance for that mortgage on that date, is first scheduled to reach 80 percent of the original value of the property securing the loan; or

Source: 12 U.S.C. §4901(2) · source URL · snapshot d01dd576b43f979f

12 U.S.C. §4901(4) — Good payment history definition (60/30 day rule)

made a mortgage payment that was 60 days or longer past due during the 12-month period beginning 24 months before the later of (i) the date on which the mortgage reaches the cancellation date , or (ii) the date that the mortgagor submits a request for cancellation under section 4902(a)(1) of this title ; or

Source: 12 U.S.C. §4901(4) · source URL · snapshot d01dd576b43f979f

12 U.S.C. §4901(18) — Termination date definition (78% LTV trigger)

with respect to a fixed rate mortgage , the date on which the principal balance of the mortgage, based solely on the initial amortization schedule for that mortgage, and irrespective of the outstanding balance for that mortgage on that date, is first scheduled to reach 78 percent of the original value of the property securing the loan; and

Source: 12 U.S.C. §4901(18) · source URL · snapshot d01dd576b43f979f

12 U.S.C. §4901(12) — Original value definition

The term “ original value ”, with respect to a residential mortgage transaction , means the lesser of the sales price of the property securing the mortgage, as reflected in the contract, or the appraised value at the time at which the subject residential mortgage transaction was consummated. In the case of a residential mortgage transaction for refinancing the principal residence of the mortgagor, such term means only the appraised value relied upon by the mortgagee to approve the refinance transaction.

Source: 12 U.S.C. §4901(12) · source URL · snapshot d01dd576b43f979f