Can a mortgage lender add PMI to my loan after we are already into the term of the loan, without it having been disclosed on the closing documents?

UPDATED: Jun 5, 2009

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Can a mortgage lender add PMI to my loan after we are already into the term of the loan, without it having been disclosed on the closing documents?

I am 1 year and 8 months into my mtg. Trying to refi under the Fannie Mae program and currently I do not pay PMI. FNMA program came back to my lender to require PMI. Program guidelines say I don’t have to unless I currently pay PMI. In trying to determine the cause and correct the issue, I find that Bank of America added PMI when they had a block of loans, including mine, be guaranteed by FNMA. PMI is not listed in my closng documents but it is preventing me from being able to refinance and realize the savings of a lower interest rate.

Asked on June 5, 2009 under Real Estate Law, Texas


B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

If I understand the situation, you want to refinance, but you can't do it unless you add PMI, which you don't have right now.  That's not the same thing as adding PMI to an existing loan after the closing.

A refinance is still a financing, it is a new contract with new terms.  So it's not improper for the lender to ask for PMI for the first time, in a refinance context.

If the requirement is coming from FNMA, and you believe that this is not consistent with their own guidelines, you'll need to take it up with them, since Bank of America isn't going to argue with FNMA.  You'll probably need a lawyer's help, because this will get technical very quickly.  One place to find a qualified attorney is our website,

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