by donsullie » Mon Jul 06, 2009 06:10 pm
Because of the housing downturn and losses in our 401 we might have to let our house go into foreclosure. Will having this insurance protect the mortage co and the borrower?
Posted: Wed Jul 08, 2009 08:51 am Post Subject:
Correct me if I'm wrong, but doesn't PMI compensate only a portion of the loan amount owed to the bank?
I guess that on a 90% loan the amount of PMI insurance is only 10% of the loan amount. Also, I gather that short selling of the property or foreclosure needs the approval of the private mortgage insurer, is that true?
Posted: Wed Jul 08, 2009 11:12 am Post Subject:
Would they really consider that part of the loss if I default?
No, their loss of interest over the term of the loan isn't considered in the default. They are due the balance of the loan. I don't think that PMI pays until the home is sold...While I personally don't have any experience with this (thank God!). My next door neighbor did get his house foreclosed. The way that one worked is the bank sold the house (to a flipper). Then PMI paid the bank. Then the PMI carrier came to my neighbor for repayment. He started bankruptcy proceedings just before he got his foreclosure notice, so I don't know how that worked out. In his case the numbers worked out like this (or pretty close from what I remember)... He owed the bank 75k, the bank spent about 3k cleaning that mess up, (they shot themselves in the foot trashing it pretty bad before they left) the bank sold it for 35k (including the realtor fees). PMI paid the bank, and both the bank AND the PMI carrier came after him for 43k. I think maybe the PMI carrier didn't cover the clean up of the property. I don't recall how the break down was. But I do remember that both the bank and the PMI carrier were threatening suit.Correct me if I'm wrong, but doesn't PMI compensate only a portion of the loan amount owed to the bank?
Kelvin I thought that PMI covered the loan balance, I could be wrong. We (fortunately) didn't have to carry PMI on the house we live in now (but have had on other homes over the years) so I can't look at a policy. Anyone else out there have a PMI policy or contract they can look at?I guess that on a 90% loan the amount of PMI insurance is only 10% of the loan amount.
Oh no Kelvin I'm just sure that isn't correct. What good would it do to only compensate the bank for the owners down payment?Also, I gather that short selling of the property or foreclosure needs the approval of the private mortgage insurer, is that true?
That may be correct or may have some conditions, ie if mortgagee wants to sell for less than ''blank'' percentage of loan pay offPosted: Sun Aug 22, 2010 10:06 pm Post Subject: pmi
considering pmi would have to pay up to 20% of the loan amount, wouldnt it be wise for them to pay the deliquent payment amount, and keep the homeowner out of forclosure?
Posted: Wed May 16, 2012 10:12 pm Post Subject:
So basically, we are paying a 3rd party company to insure a company that we borrow money from to hunt us down like a turkey on thanksgiving and take more of our giblets! lol
Posted: Wed May 16, 2012 10:19 pm Post Subject:
Well... if you don't pay on your loan as required.... yes. The other choice was not to give the load.
But why are you bringing up such and old thread.
Posted: Wed May 16, 2012 10:21 pm Post Subject:
The house my parents purchased when they were first married is valued at 820% more now than the day they purchased it. I can guarantee you that I don't make 820% more than my Dad did and I have a College education and a professional degree which he did not. It's insane the way real estate is so high along with everything else and wages have not even come close to match the growth rate. Many people don't realize how much because many have 2 income households which they did not have back in the day. However those of us in a single income household with children know exactly what I am referring to. If you do the Math, and I suggest you do - you will see what I mean. PMI gives me PMS
Posted: Wed Jan 23, 2013 10:32 pm Post Subject: Tax write off
Why isn't PMI a tax write off. I know car insurance is not but homeowners is??? Humm
Posted: Thu Jan 24, 2013 05:23 am Post Subject:
I know car insurance is not but homeowners is???
Homeowner's insurance premiums are NOT tax deductible any more than auto insurance is tax deductible.
PMI is not insurance for anyone other than the lender in the event you default on your loan. When you default on your loan, you may also receive a "1099" (Miscellaneous Income) for the unpaid loan amount, and would have to report that as income, too.
Unfortunately, PMI is a ripoff perpetrated on the American public and blessed by Congress.
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