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It's likely a HARP there are several reasons why the PMI will still exist
1)- it's a conventional loan on HARP- where they don't use an appraisal, but if PMI is present you still need it- so if you are upside down on the house but want a lower payment due to better rates you still qualify.
2) it's FHA, and that will always have PMI if it's 30
3)- at 87% LTV you have no choice to accept PMI or an inflated rate. The problem is, the bank will frown upon choosing the appraisal based on higher value. Banks are so tight about appraisal requirements chances are all of them will be of similar value since any liberties taken in attempts to raise will be seen as attempts to fraud. It actually IS fraud to use multiple appraisers to manipulate value.
In summary, they are screwed.
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