Q:Even though the lender originally said we might be able to remove the private mortgage insurance, they now say we need to fill out forms, get a new appraisal, and then it still might not be removed. Has this rule changed?

A:Removing the private mortgage insurance (PMI) is at the discretion of the lender. The lender is the one insured against the borrower's loss (usually on the top 20 percent of the loan.

Even though the lender gave you the removal guidelines at the time you took out the loan, those might change. In fact, most lenders evaluate removing PMI on a case-by-case basis.

While guidelines differ from lender to lender, most lenders would require that the borrower provide a fee appraisal showing 20 percent or more equity in the property and also have a satisfactory loan repayment record.

But other factors come into play, such as the strength of the local real estate market, the neighborhood, and the property itself.

A class-action suit last year against a lender for not removing private mortgage insurance ruled in favor of the lender. The court said that since the lender wrote the loan requiring PMI and the borrower was well aware of its inclusion in the loan, it was up to the lender to decide whether or not it should be removed (although the industry is currently reviewing blanket policies that might give consumers a better idea of removal policy guidelines).

It's certainly worth a shot to get the appraisal and ask the lender to remove the PMI. If the request is denied, ask why and also ask what it would take to have it removed. Be persistent---as with most inquiries, the squeaky wheel gets the grease!