The pmi insurance is in place to protect the lender in case the mortgagor defaults. Basically the coverage is used to put the bank the the investors of the mortgage/bond protection if the loan goes into default. The coverage usually is around 20% of the principle mortgage balance. When the loan goes to foreclosure the bank files a claim with the PMI company and after review will pay the bank in 60 days of filing assuming the documentation is correct.

The PMI company usually reserves the rights to go after dececiency rights when it pays the claim to the bank. So the bank may assign the deficency rights over the pmi company.

The amount the bank recieves from the pmi does not assist you in paying off loan since the payment is not made is after the bank foreclosues and the property has been transfered to the winning bidder at the foreclosure sale.


Keith Manson
First Weber Group
Certified Distressed Property Expert
Greenfield,Wisconsin

The insurance policy pays the bank in case your default on the loan. Unfortunately this insurance will not help your overall situation.

You might want to take one of these professionals up and have them analyze your situation to see what options you have.

Hi JWD,
The thing to remember here is the PMI/MPI policy is in place to protect the lender, NOT you. Sorry. You paid the insurance premiums, so the lender would give you the loan with not much money down. It is designed to protect the lender in case of default.

In recent times, when most buyers could not come up with a 20% down payment, PMI/MPI was born. Since the lender would generally get 80% of the home value at the sheriff sale, the other 20% needed to be covered by an insurance policy....and someone....ok , YOU.....had to pay the premiums for it.....that is why the policies exist.

We are local realtors. Can we help you by marketing the home, and perhaps getting you a short sale offer? (We know local investors looking for good rental properties.) This may help to save your credit. Call us at 440-231-0977 Doris & Michael Wright/ Century 21 Homestar Mentor or email us at wrighthomes@roadrunner.com

We know you will be on the other side of this situation soon and things will look brighter again. Right now, there are just many worries and unknowns to deal with. Stay in communication with the lender and cooperate with them. Ask questions and seek help. Thanks and good luck. Doris & Michael Wright

The PMI or MIP you pay actually only protects the bank in case you default. The way buyers benefit is in that you can get a loan for less than the old "standard" 20% down... Unfortunately you don't actually have insurance for you to fall back on.

I would suggest looking into a short sale rather than just letting the property go to foreclosure. I may be able to help you find a good agent in that area if you would like to consider that as an option. I would even be willing to do a phone consultation with you if you like. We can talk quickly and see if a short sale makes since to your specific situation.

Feel free to call 937-353-4600 or email Mark@markryangroup.com if you want to talk more.

Sincerely,

Mark Ryan