foreclosure pmi insurance
Not understanding a sentence?
Here’s how this insurance helps protect your lender from loss: You borrow $250,000 and your home is worth $275,000. You get PMI which “covers” the balance above 80% LTV, ($220,000), leaving $30,000 over 80% LTV that is “exposed.” Should you default on your loan and require the lender to foreclose, the PMI company would pay your lender the portion of the $30,000 they insure less the amount the lender recovers, if any, at the foreclosure sale. What does the part about less the amount mean? Does it mean minus the $30,000 from the proceeds of the foreclosure sale?
So the lender only gets the $30,000. Does the rest go to the pmi company.
Go **** yourself i was talking about the lenders, but i dont think that the PMI company covers the full amount that was defaulted. b**ch!!!!!!!!!!!!!!!!
Thank you very much!
PMI does not cover the full exposure of the lender as you state. They are covering the top slice (20% in this case) plus some fees. In order for the Lender not to void their claim for the PMI coverage, several things must happen. The lender must manage the default to its completion, usually foreclosure or a workout or short sale. Any agreement short of foreclosure must be approved by the PMI company.
for the amount less it means that if, from the above example, the bank sells the house for $220,000 then the PMi company pays them the $30,000. If the lender sells the hous efor $230,000 then the PMI company pays them $20,000 ($30,000 less the extra money received, in this case $10,000).
Keep in mind that the foreclosure fees are not added in to the above totals. Foreclosure generally tacks on about $40,000 in fees, lawyers costs, court costs, etc. These get added on to that $220,000 that was borrowed.
