Foreclosure in 30339>Question Details

Shelby, Other/Just Looking in 30339

Why would a mortgage company come after the homeowner for the balance after a short sale if the homeowner had PMI? Can this be construed as?

Asked by Shelby, 30339 Mon Apr 19, 2010

"double-dipping"?

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I have always understood that PMI is there to protect the lender's interest, not the buyers. I don't think the presence of PMI has anything to do with whether or not the mortgage company can come back after the homeowner!
0 votes Thank Flag Link Mon Aug 27, 2012
Mortgage insurace is paid by the borrower to insurance against the default. There are differnt amounts of coverage that the mortgage may request. If the coverage is low then the bank may incur a larger loss. If the coverage is high 20% + than the mortgage insurance may have the defeciency rights of the bank assigned to them so they collect it. It all depends on the state you live in and the indiviual deal that was negotated when you loan was underwriten.

But bottom line the bank can go after deficencies after a short sale. What do the short sale approval letter inidicate?

Keith Manson
First Weber Group
Certifed Distressed Property Expert

Metro Milwaukee

http://www.milwaukeebailout.com
0 votes Thank Flag Link Sat May 1, 2010
Shelby the PMI company can also go after any assets that the short seller has.
Web Reference: http://www.Find1Home.com
0 votes Thank Flag Link Mon Apr 19, 2010
The PMI only pays up to 80% of what the mortgage was. The other 20% is on the mortgage company. The whole key in a shgort sale is for the person negotiating on the buyers behalf, to include in the negotiations, what happens to teh shorted balance and having this balance be forgiven by the bank and the seller issued a 1099 for the write off. In addition the negotiator should negotiate how the sale is reported to the credit reporting agency. Now if this was not done. The seller needs to check with an attorney or their state as new federal laws and certain states have laws regrding short sale balances and what can be collected and what can not. good luck working things out
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Apr 19, 2010
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