Your Servicer Missed the Auto-Termination Date? You May Be Owed a Refund

The Homeowners Protection Act doesn't just give you the right to request PMI cancellation; it puts an affirmative obligation on your servicer: at 78% of original value on your scheduled amortization, PMI must terminate automatically, with no action from you, as long as you're current on payments. And there's a backstop: at the midpoint of your loan term, it must end regardless of LTV.

Systems are supposed to catch this. Systems miss. When they do, every premium charged after the trigger date was collected improperly, and unearned premiums must be returned to you.

Check yourself in five minutes

1. Find your original value: the lesser of your purchase price or original appraisal (closing documents).
2. Compute the 78% line: original value × 0.78. That's the balance at which auto-termination triggers.
3. Find when your scheduled balance crossed it: your original amortization schedule (in your closing packet, or your servicer can produce it) shows the month. Note: the automatic trigger runs on the scheduled date; if you prepaid ahead of schedule, that strengthens a cancellation request but the automatic clock is the schedule.
4. Compare against your statements: was PMI still being charged after that month? Every month after is potentially refundable.
5. Also check the midpoint: past the halfway mark of your term with PMI still on the statement? Same situation.

$150/month missed for 10 months is $1,500 sitting in the wrong bank account.

How to claim it

Put it in writing to the servicer's correspondence address (the same one used for cancellation letters, not the payment address): state that your records show the loan reached the 78% scheduled-amortization threshold on [date], request immediate termination if still active, and request a refund of all premiums collected after the termination date, with a written accounting. After cancellation or termination, unearned premiums are required to be refunded promptly; the statute contemplates a 45-day window for the return of amounts held.

Keep proof of everything. If the servicer stalls or the accounting doesn't add up, escalate in writing, and know that a CFPB complaint gets answered on a clock, which has a way of focusing a servicing department's attention.

One honest caveat

If you were delinquent when the trigger date arrived, the automatic termination is deferred until you're current, so a rough patch in your payment history can legitimately explain a later date. The servicer's written accounting should make the timeline clear either way.

Educational content, not legal or financial advice. Timelines and requirements summarized from the general HPA framework; confirm specifics with your servicer.