PMI - When Can A Lien Holder Collect?
Hello,
Under what circumstances can a mortgage company collect on PMI? If the loan forecloses and they collect then, I would think that the bank would like to get rid of the property cheap.
Thanks,
Mike
pmi is mortgage insurance, that is calculated into theperson's mortgage when the mortgage is over 80% ltv.
Thanks. I understand that. I'm not talking about the premiiums, I was looking to find out under what circumstances a bank could collect on the policy.
When the value of their collateral has been diminished as provided by the policy.
I guess my question comes down to this: If a bank is going to collect on PMI, can't I use that fact as a bargaining tool in negotiating a short sale or a REO?
pmi doesn't affect a house in foreclosure, the bank has an amount that is owed on a house and you negotiate from there not on pmi they would get????
[addsig]
I am dealing with a lender that has MI on the property. Do a google search for MGIC short sale underwriting. It will give you a site that walks you through there loss mitigation underwriting guidelines and how much they reimburse the lender if the loan defaults. It is usually 20 to 30% of the priciple loan balance at default. So you can figure the bank is getting that right off of the top to help their losses. Many times a short is not a loss to the lender at all.