NLIC.org

Ann Said:

In foreclosure process, second assumed by lender's mortgage insurance. Now what?

We Answered:

depends on the security instrument. HELOC can be collected in almost all cases.

Adrian Said:

Does mortgage insurance (PMI) protect or assist the buyer in mortgage default or just the lender?

We Answered:

1- The benefit the "lendee" gets is that he/she can buy a home with as little as 3% down instead of the customary 20% down payment.

2- The only time (as I understand it) that PMI pays out is if you actually have to forfeit your home. Then it pays the lender any money that is lost from the foreclosure and resell of the property. The lender, therefore, doesn't lose any money on the transaction but the "lendee" loses the home.

As soon as your equity represents 20% of the loan value, you can drop PMI and anyone with any sense will do so. As you can see, PMI only protects the lender.

Sandra Said:

Do you have to use the mortgage insurance the lender provides?

We Answered:

I would love to answer your question but I need much much much more information.

When you say mortgage insurance I assume you mean PMI. No you can ask the lender to check with with other companies, the major ones are GMAC, MGIC, GE... There are a few. But the difference in price will be nothing.

If you can give a bit more information about you loan size ect it will make this question easier to answer. With that size of mortgage insurance I would guess your loan is large 400K+

Tell us your loan amount and your LTV and anybody will tell you what you should be paying. Or go to MGIC.

http://www.mgic.com/is/html/ratefinder.h…

This will tell you what you are paying or should be paying. You might need to ask your loan officer exactly what program you are on to calculate it, there are only about 10 billion options out there.


********* UPDATE **************

HELL YES LOOK ELSEWHERE. That is ridiculous. A little hint most non prime lenders dont charge mortgage insurance, thats why your rate is so high. Actually I dont know any sub prime lenders that charge it. But we are only approved with 300 companies and do loan in almost every state but I could be wrong. I dont know what the hell the loan officer is doing, but your first phone call today or monday morning is to another lender. Thats insane. You are getting screwed.

Call a local broker, hell call 10 of them. You just need to find 1 that knows what they are doing. Your current one clearly doesnt or is absolutely lying to you about the rate or the process. Either way he/she is lying or they are incompetent. Is that who you want working on your loan?

Grace Said:

Can a lender or servicer force place mortgage insurance?

We Answered:

In most states and provinces there is an illegal thing known as tied selling. Tied selling is when a company says "You can only get this if you do this". In some situations insurance falls in the gap and banks will say you need to insure the debt to make sure they get paid (IE: if you are seriously ill and you need to pay your medical bills...if you're lucky enough to not get laughed at by the banker for asking for that...)

In your question, can the bank force you to get it after you sign the peperwork and after your mortgage is inforce. NO: what was signed was signed and they cannot change that contract you signed. When it's up for renewal, possibly, but not before then.

Aaron Said:

Can I remove from my lender my mortgage insurance,I'm only one year from my new house?

We Answered:

I presume you are talking about the insurance you pay each month (built into your payment) because you did not have a 20% down payment?

This cannot be dropped until you have the required equity in your home - typically at least 20%. You then must pay the cost to have your home appraised to prove to your lender that the value is really there. You lender will choose the appraiser.

If the home value is high enough, you can apply to drop the coverage. Another requirement is you cannot have had any late payments during the preceding 12 months of your loan - a few lenders require 24 months of on-time payments.

Here is a BIG caveat: The information above is for conventional mortgage loans only. If you have an FHA mortgage, you cannot stop paying mortgage insurance until the loan balance has dropped to 78% of the lower of the purchase price or the appraised value at purchase. In other words, if you have an FHA loan, the current appraised value means nothing.

Hope I was clear.

Good luck.