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You have bought your dream house and money is tight but you can live with your mortgage. Then one day you receive a letter from your Private Mortgage Insurance Company that your rates have doubled. You wonder why and they tell you that there is a problem with your credit report, and you thought everything is okay.

Reports show that up to one third of all credit reports have errors. If you are carrying PMI on your mortgage you may be at risk if the credit reports make an error or you are a victim of identity theft. And the worst part, PMI companies do not  have to warn you. The FTC is starting to look into the situation and hopefully this issue can be resolved.

That’s because PMI companies generally don’t send home buyers so-called ‘‘adverse-action” notices before doubling or tripling someone’s premium because of negative credit information. Unfortunately, this means you won’t know to check whether the information is even accurate.

But now, the Federal Trade Commission is asking a court weighing the issue to change that.In a recent court filing, the FTC asked a federal court to rule that whenever insurers raise borrowers’ PMI premiums because of negative credit information, the firms must notify consumers.

The FTC, which oversees federal fair-credit laws, intervened in a case involving homeowners slapped with $904 monthly PMI premiums - roughly triple what borrowers had anticipated. The reason for the hikes: PMI firm Radian Guaranty Inc. found negative information in the home buyers’ credit files, making the consumers look like terrible credit risks.

But in reality, the consumers’ files contained outdated or incorrect data. via BostonHerald.com

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