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Company Loan Type APR Est. Pmt.

pmi and foreclosure

Posted on: 03rd Sep, 2008 05:52 pm
I posted this question earlier in another forum but think maybe it might be better suited here.....
this is really a two part question... 1) Am wondering if there is any way to tell if a homeowner has been paying pmi on their mortgage. Am looking at a property that is currently in short sale (with 3 outstanding mortgages) and heading to foreclosure. There have probably already been 7 other mortgages that were recieved and later discharged. 2.) Am wondering if this property goes into foreclosure and pmi was paid, would the banks be more willing to negotiate because they will have gotten some of their money back through pmi--and how much could they recoup?? Is it about 65% of the original mortgage or is the percentage different. I really like the house but it needs alot of work--more work than that outstanding mortgage...any help is greatly appreciated
Welcome damoran,

Chances are that if the PMI is used to recoup some of the loan balance, then perhaps the banks will be more willing to negotiate. The amount that they'll recoup will be equal to the difference of the loan balance you owe after foreclosure or short sale and the PMI coverage offered to the banks.
Posted on: 03rd Sep, 2008 09:51 pm
thanks for responding...but is there any way to determine if PMI was indeed paid on this mortgage AND, if it was indeed paid, is there anyway to determine the percentage covered to the banks? thanks
Posted on: 04th Sep, 2008 06:28 am
You should contact the PMI company to find out if they've paid the coverage to the bank. Or else you can directly talk to the concerned officials at the bank.
Posted on: 05th Sep, 2008 06:04 am
Likely only the first mortgage would have the PMI in any case
Posted on: 13th Sep, 2008 02:36 am
There is no real way to know the specifics of the loan.

what state is the property in?

I have a program that can run the address for you, but I need to be licensed in that state in order to do it. It might be able to help you, it's called core logic.
Posted on: 01st Oct, 2008 04:38 pm
If I foreclose on my home will the balance of the loan be paid for? Say the bank sells it for less than what I owe be picked up by the PMI. Will there be Tax implications in this case. Thanks
Posted on: 02nd Dec, 2008 04:02 pm
Hi Dee Berger,

As far as I know, if the property forecloses and if there is a deficient amount resulting from the sale of the property, then the lender can file a deficiency judgment with the primary mortgage insurance (PMI) company. This helps them to get the dues and thereby saves the lender.

If the lender forgives the deficient amount, then you will have to pay the taxes on that deficient amount.This is because the IRS will consider this as your income. If you pay the deficient amount, then I don't think you will have to pay the taxes. However to be on the safer side, consult a tax assessor.

Thanks.
Posted on: 03rd Dec, 2008 12:58 am
I have a home in foreclosure. AIG has paid off my 2nd (Countywide). Now AIG had turned the amount they paid over to a collection agency (LTD). Is this legal? I hope when I die my life insurance company doesn't try to collect the money they pay out from my heirs....it would be the same difference....this is crazy.
Posted on: 14th Mar, 2009 03:17 pm
I dont think it really matters. The property is worth 65% of the original loan balance. So, lets assume that very little was paid down. What you want to do is buy the property for LESS THAN its current market value. OR, maybe you can negotiate paying a little more in exchange for a ridiculously low rate which over time would more than offset the difference in purchase price.
Posted on: 14th Mar, 2009 06:30 pm
what percent of the loan will the pmi pay the lender in a forclosure
Posted on: 19th Apr, 2011 12:55 pm
Hi mud,

This will depend upon the insurance company. As far as I know, it will pay off the deficient balance resulting from the property sale to the lender.

Thanks
Posted on: 19th Apr, 2011 10:15 pm
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