Basis of Calculation for HPA Refund for Borrower-Paid Single-Premium Plans
United Guaranty recognizes the importance of properly cancelling mortgage insurance and refunding unearned premium (if any) in accordance with the Homeowners Protection Act of 1998 (HPA).
To process or request an HPA refund for borrower-paid, single-premium plans, you have multiple options, including:
Option 1: Access MI Guide’s servicing platform to view and, in some cases, update information. You will need to process the cancellation using MI Guide. Additional details are on our Cancellations and Reinstatements webpage.
To request access to MI Guide, call 877.MI.CHOICE (877.642.4642).
Option 2: Send an email to UGC:ugcqc with the following information:
- Borrower name
- UGC MI Certificate number
- Cancellation reason applicable to an HPA-required cancellation (Loan Paid Down, Coverage No Longer Required)
- Cancellation date.
Option 3: Manual calculation. Click here for calculation formulas.
Basis of Calculation
The basis of the HPA refund for borrower-paid, single-premium plans includes the following elements:
- HPA refunds are equal to statutory unearned premium as of the end of the month prior to reaching 78% LTV (as defined in the HPA). As an example, when a requested cancellation date is within December, the statutory unearned premium would be as of November 30 (the prior month end).
- Unearned premiums are earned ratably in accordance with statutory accounting requirements at the end of each month over the expected coverage period for each certificate as homologated by the North Carolina Department of Insurance.
- The calculation of unearned premium is performed on a certificate-by-certificate basis and reflects the unique attributes of each individual loan.
- These calculations estimate the term to 78% LTV based on the estimated loan balance using the original loan amount, the original loan interest rate, and the term of the loan divided by the original value of the property securing the loan.