Answer I have never heard of that before. Refer to your original documentation regarding the PMI and see what stipulations are present. Also - just call and ask them, that may be less of a hassle 11/07/08.No they cannot increase your PMI cost or coverage as long as you do not renegotiate the terms of the mortgage.
If you renegotiate the mortgage, everything is up for negotiation. They can also require that the MI stay in force until your ltv is at 76% instead of 78% if you have had late payments.
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