California Civil Code

§ 2954.12

CIV § 2954.12 Effective Jan 1, 1998Div. 3 · Title 14 · Part 4 · Ch. 2 · Art. 2

Statute text

(a)Notwithstanding Section 2954.7, and except when a statute, regulation, rule, or written guideline promulgated by an institutional third party applicable to notes or evidence of indebtedness secured by a deed of trust or mortgage purchased in whole or in part by an institutional third party specifically prohibits cancellation during the term of the indebtedness, the lender or servicer of a loan evidenced by a note or other evidence of indebtedness that is secured by a deed of trust or mortgage on the subject property may not charge or collect future payments from a borrower for private mortgage insurance or mortgage guaranty insurance as defined in subdivision (a) of Section 12640.02 of the Insurance Code, if all of the following conditions are satisfied:

(1)The loan is for personal, family, household, or purchase money purposes, the subject property is owner-occupied, one-to-four unit residential real property, and the outstanding principal balance of the note or evidence of indebtedness secured by the senior deed of trust or mortgage on the subject property is equal to or less than 75 percent of the lesser of (A) if the loan was made for purchase of the property, the sales price of the property under such purchase; or (B) the appraised value of the property, as determined by the appraisal conducted in connection with the making of the loan.

(2)The borrower’s scheduled payment of monthly installments of principal, interest, and escrow obligations is current at the time the right to cancellation of mortgage insurance accrues.

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Legislative history

Added by Stats. 1997, Ch. 62, Sec. 1. Effective January 1, 1998.