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Jim Malak's Blog

By Jim Malak | Agent in Celebration, FL

Where is PMI in all this debacle?

I have always known that most mortgages carry a PMI payments - monthly payment to a insurance company.
Buyer defaults on payments and the bank wants to foreclose.
What is the incentive for the bank to foreclose if they are already collecting payments from the insurance company.?
I have had a few foreclosure I have helped client with in which the negotiations I was persuing was not with the mortgage company but a third party insurance who had to make payout to the banks.
Expert opinions needed to clarify this for all involved in the REO process.


By Mark LeMenager,  Mon Sep 3 2012, 16:46
They only collect if there is a foreclosure.
By Margaret Amador,  Tue Sep 4 2012, 04:17
It is quite simply a trigger point. That is a point where the investor/lender nets a better return all facts considered. That doesn't necessarily make sense to us Realtors knowing the market but it does make sense to the lender/investor. I gave up a listing because it just didn't make sense when the lender needed more than the market could bear at that time. We as Realtors are not always (or most of the time) privy to that knowledge. We find out the hard way. Make sure you know whether there is a PMI but that is not the whole story since investors many times put their own port folio insurance on their investments.

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