Posted by Brent_IL on July 12, 2003 at 08:11:28:
Because the lender is making the loan without a cushion of equity, PMI is purchased by the lender as a percentage of the top part of the loan to compensate them if the loan goes south. That translates into a fixed monetary amount. If the lender comes up short after default, the insurance company will pay up to the amount of the coverage.
PMI, which allows a buyer to get a high LTV loan, will impact the buyer because he is the one that pays for it. That’s his only involvement in the process.
PMI Questions - Posted by Greg D
Posted by Greg D on July 07, 2003 at 15:42:08:
I have a quick question about PMI.
If a borrower is required to have PMI on a loan, what happens should the buyer default? Where does the PMI kick in?
If the lender forecloses, and the bid amount covers the arrears and fees, does PMI enter the picture at all?
If the final sale price is less than the arrears and fees, does PMI simply pay the difference, or does the PMI holder buy the note from the lender for the balance due.
Do PMI companies ever end up holding the notes?
What exactly is the process?
Thanks.