Comments on: Will mortgage insurance (PMI) protect U from a deficiency judgment in a foreclosure?

By: Patrick

Patrick — Sat, 20 Jun 2009 08:36:59 +0000

The other answerers have it correct. PMI is insurance for the bank because loans where b uyers put less than 20% down are more likely to go into foreclosure than those that do have 20% down. Because of that all loans where borrowers put less than 20% down must have PMI.

If you go into foreclosure you will owe the bank back any money left on the loan, plus late fees, plus all fees associated with the foreclosure. Foreclosure usually adds 40 to 50 thousand dollars to the amount owed. Of course, when they sell the house they deduct the money they sold the house for from this amount.

If you are thinking of going into foreclosure try for a deed-in-lieu or to get the bank to agree to a short sale. Both are better alternatives and allow you to walk away with only minimal damage.
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By: Landlord

Landlord — Sat, 20 Jun 2009 07:50:59 +0000

No, it is insurance for the bank that loaned you money to the other bank that funds them. THEY are protected if you walk, not you. You can not insure yourself for having bad character.
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By: justcruizin

justcruizin — Sat, 20 Jun 2009 07:15:59 +0000

No, sorry the PMI only protects the lender.
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By: alterfemego

alterfemego — Sat, 20 Jun 2009 06:33:59 +0000

No, it only protects the lender. And yes you could have a deficiency judgement placed against you.
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appraiser/realtor

By: bob W

bob W — Sat, 20 Jun 2009 05:51:59 +0000

no
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