Fourth Circuit Rules Voluntary PMI Cancellation Does Not Trigger Federal Refund Rights

What You Need to Know

• PMI refunds only apply to statutory cancellations - The Fourth Circuit ruled that homeowners are only entitled to refunds of unearned private mortgage insurance premiums when PMI is cancelled under specific statutory requirements in the Homeowners Protection Act, not through voluntary agreements with servicers.
• Two-step refund process requires initial qualification - Section 4902(f)(2) only requires insurers to transfer unearned premiums to servicers when borrowers first qualify for refunds under Section 4902(f)(1), creating a linked requirement that both must be satisfied.
• State law claims remain viable - While the federal HPA claim was dismissed, homeowners may still pursue state law remedies like unjust enrichment or breach of contract for voluntary PMI cancellation scenarios.