If you have purchased a home over the past twenty years or so, then you probably know what private mortgage insurance (PMI) is. If your mortgage amount is over 80% of the appraised value, then the lender will require that you pay PMI to insure their interest in the property due to the loan-to-value ratio exceeding 80%.
I recently had to sue the lender on one of my rental properties over an issue with PMI. I attempted to pay down the loan to the 80% level in order to get rid of the PMI requirement. The lender took the position that their investor required that I have the mortgage in good standing for two years before they would allow this.
I took them to court, and got paid outside court, on the grounds that they were unlawfully imposing a requirement outside of our written agreement(s). How does $2,500 in back-pay sound to you? These banks have gotten too big for their britches lately. Sometimes you have to fight back.