If I let my home go to foreclosure doe's the mortage insurance I been paying all along take care of my loan?

Asked by schmidtgolfer, Tracy, CA Tue Feb 26, 2013

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Taj Weldon, Agent, Tracy, CA
Sat Mar 2, 2013
Hi Schmidgolfer,
The Realtors below are correct.Private Mortgage Insurance is for the lender's benefit.It protects them from your default.
If you allow the home to foreclose it will have an impact in more waysa than one.
There are better options to foreclosure.It may seem like the other options are not worth the effort but in the long run you will be glad that you put forth the additional effort.
IF you would like to discuss options to foreclosure please feel free to call or email me.

Thank you,
Taj Weldon
DRE 01816152
Connect Realty.com INC.
0 votes
Adriana Orla…, Agent, Tracy, CA
Wed Feb 27, 2013

Mortgage insurance benefits and protects the lender/investor on the note. It does not protect the borrowers from any credit hit , judgement or liability. If you are in a hardship and this home is a primary residence, there are options available that may help you stay in your home depending on the situation. I am happy to share with you those options in case there is something you have not tried.

Otherwise, the best solution is a short sale. Short sales are less complicated these days and some lenders will assist with funds for the borrower for moving expenses. Also, as an owner occupant, the " Debt forgiveness act" is in effect until year end which will forgive owner occupants the deficient payoff amount from being taxed as income.

If you have an investment property, short sale is still a better option than foreclosure. There was a rumor or perception that foreclosure gives you a clean slate from further tax liabilty but , the debt or judgement can contnue the collection past the foreclosure and tax liability can cost you more money.

HOWEVER, tax advice is recommended with a certified/qualified tax consultant in any real estate transaction.

Feel free to contact me for a private consultation.

Thank you-

Adriana Orlando, Realtor
Regency Real Estate, Tracy
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Henry Brooks, Agent, Ripon, CA
Wed Feb 27, 2013
Unfortunately not...

Mortgage Insurance only protects the lender. You may opt to do a short-sale If you are in a hardship and may be a good solution for your current situation. Call me anytime to discuss your options in more detail as well @ 209-814-0119. Thanks, Henry Brooks
Web Reference:  http://www.realtorbrooks.com
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John Keating, Agent, Alameda, CA
Tue Feb 26, 2013
Mortgage Insurance is in place to protect the lender not the home owner. There are other options rather than allowing the lender to foreclose on your home. If you have a hardship one of the options is a Short Sale. I work with most of the major lender's to help home owner's complete a short sale. It is a way you can have less impact on your credit and because it is considered a work out with the bank you can purchase again in just a few years. A foreclosure is considered you walked away from your obligation and will have major effects on your credit for many years. If you need more information please do not hesitate to contact me. Thank you and have a great day!

John Keating
0 votes
Alan May, Agent, Evanston, IL
Tue Feb 26, 2013
Private mortgage insurance does not protect you, (even though you're the one who typically pays the premium) it's in place to protect the lender from the loss if you should default on your payments.

That doesn't let you off the hook financially, it is just a safety net for the lender.
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Rocky G.H. H…, Agent, Ripon, CA
Tue Feb 26, 2013
There is a lot of truth in what has been said so far. Ultimately Mortgage Insurance is what you pay to protect the lender from the risk of lending the funds. The good news is this may help is securing a Short Sale approval if you choose this option.

Rocky G.H. Hawrysz
Prudential California Realty
(209) 444-6610 Direct
(209) 433-2000 Fax
License No. 01468373
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Nino Koochou, Agent, Tracy, CA
Tue Feb 26, 2013

It's best to short sale vs foreclosure.. if this is your primary residence, then you may qualify for mortgage debt forgivness program, which it was extended till end of this year.
Please call or email me so that we cxan talk in details.

Nino Koochou CRS,QSC,A-REO
Re/Max Property Professionals
DRE# 01335001
(209) 814-3424 Ph
(209) 836-0656 Fax
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blaison samu…, Agent, Santa Clara, CA
Tue Feb 26, 2013
Mortgage insurance is basically benefit the lender and not the homeowner! Do you have any financial hardship or upside down on the home value? Short sale might be the better solution for you rather than foreclosure. Always consult with professional before you decide anything.

If you qualify for short sale and bank approves it then they will forgive the remaining loan and you could qualify to buy another home immediately or 2-3 years, depends on your current situation.

I have helped many families to avoid foreclosure. Let us know if you have any further questions.
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Ron Thomas, Agent, Fresno, CA
Tue Feb 26, 2013
OH, if only it were that simple:
Everyone could just dump on the Banks and Insurance companies.
No one would be responsible for their obligations.
Committment would mean nothing; just do it again and again.
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Joseph Gus S…, Agent, Tracy, CA
Tue Feb 26, 2013
It depends what type of Insurance you are talking about, but as a point of interest, there is no need for you to let the property go to foreclosure when most all banks now will work with you on short selling the place. Doing a short sale has a significantly lesser negative effect on your credit, you should try a short sale before it goes to foreclosure, its better for you in the long run. If yo would like to discuss feel free to call me, I am specifically trained to handle transactions like that. Gus 209-740-0767
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Ron and Eva…, Agent, Tracy, CA
Tue Feb 26, 2013
Your asking the wrong question. Why would you let your home go into foreclosure when the market, tax laws, foreclosure laws are all in your benefit. We have helped many homeowners like you get out of a foreclosure and with a short sale put money in their pocket, saved their credit and allowed them to move on their own terms not the banks.
A foreclosure means everyone loses, the bank, the community and you. With a short sale everyone wins the bank, the community and YOU! Don't hurt yourself and your community by not exploring the option of a short sale. the benefits far outweigh a foreclosure.
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Debra (Debbi…, Agent, Livingston, NJ
Tue Feb 26, 2013
No, it doesn't.
You're still responsible for the balance of the loan.

If you allow the home to go into foreclosure, your credit will be negatively impacted...you also won't be able to buy another home for many years.
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