VA-PWC real estate question (2013, foreclosed, insurance)

[angela2013]

I bought a foreclosed Townhouse five years ago. I have a FHA loan on the property and there is a MIP of $60. I was reviewing the papers and I realized that the lender instead of using the appraisal value of the property at $200K they used the market value of the property at $154,500.
My question is: Is this right? legal?
The county assessment of the property now is over $200K. I requested to the lender to remove the MIP, they will answer me in 7 days. We'll see what happens.
-looking forward to see some answers to my questions.

Thanks

Angela

[NovaOne]

Lenders can do whatever they want. It's their money, their decision. You can go with a different lender to see if they'll use a higher value. However, these days, lenders will typically use the lower of whatever they can find, whether its the appraisal value, actual sales, price, or county assessment.

[Mike From NIU]

From http://themortgagereports.com/7570/fha-mip-cancel, the following:
How To Get Rid Of Your FHA Mortgage Insurance

FHA mortgage insurance is not permanent. Eventually, FHA mortgage insurance can go away. The schedule for getting rid of MIP changes by loan term.
For FHA loans endorsed prior to June 3, 2013, the MIP cancelation terms are as follows :

• 30-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value and annual MIP has been paid for at least 60 months.
• 15-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value. There is no requirement for MIP to be paid for at least 60 months.

Note that the loan-to-value calculation is not based on the current appraised value of the home; it's based on the FHA's last known value of the home. In many situations, the last known value is the home's purchase price.