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
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.
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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.