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lbrodeur1965 · Joined: 21 Dec 2008 Posts: 7 3.81 Dollars($)

If you end up in deed in lieu or even full foreclosure, does PMI come in to help with the deficiency? Or do we pay this for nothing?

jameshogg · Posted: Wed Dec 24, 2008 11:34 pm Post subject:

Hi lbrodeur,

Private Mortgage Insurance (PMI) is an extra insurance required by the lenders from most home-buyers who obtain loans at a less than 20 percent down. PMI plays an important role because it protects a lender against loss if a borrower defaults on a loan.

In case of a deed in lieu, the deficient amount is forgiven by the lender. As far as I know, in case of a foreclosure, if there is a deficient amount, then the lender will try to recover it from the PMI. If the deficient amount exceeds the PMI, then the lender may ask you to pay it.

Wish you a Merry Christmas.

Thanks

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