Which law's definition includes borrowers needing a good payment history for PMI cancellation?

The correct answer is the Homeowners Protection Act (HPA). This federal law establishes rules regarding private mortgage insurance (PMI), specifically focusing on when it can be canceled. Under the HPA, borrowers are entitled to request the cancellation of PMI once they have achieved a certain level of equity in their home, typically when their loan balance reaches 80% of the original property value. However, the law also emphasizes the importance of maintaining a good payment history; borrowers must have a solid track record of on-time payments to be eligible for PMI cancellation. This safeguards lenders against potential payment defaults and ensures that only responsible borrowers can benefit from PMI removal.

The other laws listed address different aspects of mortgage lending and consumer protection. For instance, the Home Mortgage Disclosure Act primarily deals with data collection regarding mortgage lending to ensure transparency and prevent discrimination. Mortgage Assistance Relief Services relates to services designed to help borrowers avoid foreclosure but does not specifically focus on PMI. The Home Ownership Equity Protection Act is geared toward protecting borrowers from predatory lending practices involving high-cost mortgages, rather than the intricacies of PMI cancellation.