Car Insurance Video
Car Insurance Video
Mortgage Insurance And Short Sale Files
Today, we would like to discuss mortgage insurance. We do not have the time to gratify all of your needs on this matter. So, if you want more details on this important topic, check out our estore with our video package.
At the very fundamental level there are two kinds of mortgage insurance. There is PMI, private mortgage insurance. If the consumer goes out and gets a loan that is higher than 80 percent of the value of the home, they have to get PMI. The other type of mortgage insurance is LPMI or lender placed mortgage insurance. This is where the bank looks at a group of loans and chooses that the loans seem a little dicey. So, they put LPMI on the loans to protect their assets.
We appreciate that there is a risk, but it doesn’t necessarily make sense for a bank to lend money to someone that they believe is a risk to default. So, if the loan defaults, the bank or investor may or may not be accountable for the loss. It is insurance precisely like your car insurance or home owners insurance.
In a short sale, the bank has to go to the mortgage insurance company to get permission to complete a short sale. So, the mortgage insurance company has the priority interest in the loan. In essence, the investor gives up their right.
In some states, like Arizona Short sales, at a certain point that cash is maxed out. When the deficit is so great, the insurance is maxed out. For example, with a $100,000 loss, the mortgage insurance business may have a $40,000 insurance policy. So, the mortgage insurance company can only collect $40,000. The mortgage business, in one explicit case, is in fact asking for $40,000 from the lender. The mortgage insurance company is actually demanding money from the bank or forcing the property to go to foreclosure.
One specific key to battling the mortage insurance company is documentation of hardship. When their payout is the same with or without the short sale, you will discover the short sale to be much more complex. The mortgage insurance company is basically willing to take the house owner down with them.
Get powered up by Kevin and Fred at Short Sale Power Hour by the Short Sale Specialists of Arizona
Felipe Esparza – Car Insurance
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