Dear George: “What is the Federal Law that requires lenders to notify buyers when Private Mortgage Insurance (‘PMI’) is to be removed from loan? I have checked my loan. The loan was paid down below the 80% Loan To Value threshold that requires PMI several years ago. The lender never notified me. I called the lender. My lender said it would cost me $150.00 to see if my home would appraise. I called my real estate agent. She informed me all the houses in my sub-division have appreciated. Do I have to pay the $150 to get the PMI removed?” – Miffed

Dear Miffed: The federal law is The Homeowner’s Protection Act of 1998. It became effective July 29, 1999. If your loan originated on or after July 29, 1999, the lender is required to provide a written statement to you at closing explaining that you have PMI on your mortgage. The statement must also explain that you have the right to have it cancelled at a certain point.

Your lender also has an obligation to send you an annual reminder that you have PMI on your mortgage. That reminder must also include that you have the right to request cancellation once you’ve met cancellation requirements. The annual reminder notification is required of all loans with cancelable PMI, not just those obtained after July 29, 1999. There are exceptions. There are also some variable conditions such as the loan payments must be current. PrivateMI.com is one of several sites that provide more detailed information about PMI cancellation.

The cancellation page address is http://www.privatemi.com/cancel/cancel_law.cfm.

Dear George: “We are planning to purchase a 5 year old house in Texas. However, we ran into a problem locating an insurance company that would cover the house because the house has a ‘history’ of water damage. Some of the firms that were willing to insure the home quoted us an extremely high premium. Their explanation was that the house had a higher risk of ‘mold’ due to the history of water damage despite the fact that currently there is no evidence of mold. Based upon your experience, will the history of water damage make selling this house more difficult (at least in Texas)?” – Confused & Disappointed

Dear Confused & Disappointed: I’m told that all homes have mold. However, it is mold classified as “toxic” that has caused the “stir” (at least in Texas) over the past two years. Mold, including the “toxic” variety, grow in moisture rich environments. Thus the connection between water damage claims and mold. This is an extremely complex issue that is not limited to Texas. In fact, I’m informed that the National Association of REALTORS® has recently formed a task force dealing with this issue. Based upon my nearly 26 years in the real estate industry, I have never encountered this exact type of situation.

However, I believe it is not so much the availability of homeowner insurance coverage for homes that have a history of water damage claims, as it is the cost of such coverage. In your particular situation it will be more difficult to sell your Texas home, due to its insurability under present conditions, than it was several years ago. But I would also urge you to keep in mind that the insurability (including renewal policies) of any home (water-damaged or not) is likely to be affected.

Dear George: “The listing agreement on my home expires in five days. If I sell the house to my ex-spouse one day after the listing expires, does my broker have any rights to a commission? The broker did not bring my ex-spouse to me as a potential buyer. If anyone who saw the house while it was listed comes back to make an offer, how long am I obligated to pay a fee to the broker after the listing expires?” – Harried

Dear Harried: Most listing agreements contain “protection period” provisions. Such provisions typically require the broker to perform certain actions in order to “protect” the broker’s rights to claim a commission in the event you sell to a buyer the broker has identified as being “protected”. Even so, the broker’s right to claim a commission exists subject to certain limitations. The answers to your questions can be found in the listing agreement you signed when you listed your home.