Mortgage Company Refusing To Refund Pmi After Reaching Required Ltv – Do I Have Legal Recourse? (kentucky, Usa)

I’m dealing with a frustrating situation regarding my private mortgage insurance (PMI) and hoping for some legal guidance.

I have a mortgage in Kentucky. We made large extra payments, bringing our loan-to-value (LTV) below 78% by mid-2023. Per the Homeowners Protection Act (HPA), I understand that PMI should have been automatically removed once we hit that threshold.

However, the lender claims that because we did not “request” PMI removal, they were allowed to keep charging it until their scheduled termination date. At this point, they’ve overcharged us by roughly $1,400, and they’re refusing to issue a refund.

I’ve reviewed my mortgage contract and the HPA, and from my understanding:

• PMI must be automatically terminated when the LTV reaches 78% (assuming no late payments). • The lender cannot extend PMI past this point unless there’s an issue with payment history. • Their reasoning that we needed to “request” cancellation doesn’t seem to apply, as we hit the automatic termination threshold. 

My Questions:

1. Is the lender legally required to refund PMI overpayments after reaching 78% LTV? 2. Does their argument about “not requesting” removal hold any weight under the HPA? 3. If they refuse to refund the money, what is my best course of action? (CFPB complaint, legal action, etc.) 

I plan to send a formal demand letter requesting the refund, but I want to be sure I’m on solid legal ground before escalating. Any insight into similar cases, applicable laws, or next steps would be greatly appreciated!

Location: Kentucky, USA

Thanks in advance!