Posted: 6/17/2011 11:36:10 AM EDT
|
Most, if not all lenders, require PMI (Private Mortgage Insurance) coverage be purchased by the barrower if the loan is over 80% of the value of the home. I would tend to believe that most of the properties that went into foreclosure with the housing crisis were in debt for 90%-120% of the value. So, shouldn’t the PMI have had to cover the default? |
|
Quoted:
Most, if not all lenders, require PMI (Private Mortgage Insurance)coverage be purchased by the barrower if the loan is over 80% of the value ofthe home.
I would tend to believe that most of the properties thatwent into foreclosure with the housing crisis were in debt for 90%-120% of thevalue.
So, shouldn’t the PMI have had to cover the default?
From what I understand.. the bank that loaned the money turned around and bought insurance to cover any potential payouts under default from an another insurer (I think AIG).. The number of defaults and payouts almost put that insurer under.. Brian |