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andrewward001 · Joined: 28 Aug 2009 Posts: 51 0.00 Dollars($)

I am in confusion.

lender asks for PMI to safeguard against the borrower's default. They are also recovering mortgage amount by foreclosure process.

furthermore even after forclosure, borrower is responsible for paying balance amount.

Does someone give useful thoughts?

jenkin7 · Posted: Mon Sep 07, 2009 1:52 am Post subject:

Hi Andrew,

The extent to which the lenders are protected against any loss in case of a default depends on the amount of the mortgage insurance. The mortgage insurance does not always cover the full amount of the loss suffered by the lender due to the default. In situations where the insurance money is insufficient to cover the loss, the lenders go after the borrower to collect the deficiency.

andrewward001 · Joined: 28 Aug 2009 Posts: 51 0.00 Dollars($)

Hu Jenkin,

you mean to say that in case of foreclosure or BK, right way to calculate one's liability is

Current mortgage amount - Saleable Value - mortgage insurance amount

Is it true?

I am still confused.

sunnyca2009 · Joined: 04 Aug 2009 Posts: 1731 35.55 Dollars($)

PMI protects the lenders against any defaults

If you staop makign payments on the loan the insurance company is liable to pay them some money to cover the difference

andrewward001 · Joined: 28 Aug 2009 Posts: 51 0.00 Dollars($)

sunnyca2009

i am not doubting on it.

if some one is going for foreclosure, how much will he get?

1 Saleable Value - ( Current mortgage amount - mortgage insurance amount)

Or

2 Saleable Value - Current mortgage amount

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