Question by Daniel: What does my PMI cover, and why has this not covered the losses of recent foreclosures?
I thought any mortgage with less than 20% down will automatically be paying for PMI (primary mortgage insurance). Why has this not minimized the bank losses with recent foreclosures? Why am I paying it?
Best answer:
Answer by PelMel
PMI usually covers only a small portion of the loan, maybe 10-20%, for the lender (to cover the gap of a 20% down payment). And the lender needs to go through the full foreclosure process and still have a loss before they can make a claim against PMI. PMI never has benefited home owner, and it has limited benefits for the lender. It sure seems like a waste of money, doesn’t it?
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Tags: losses, this, cover, covered, recent, mortgage insurance <BR/>
