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Alexander Said:

Is mortgage Default insurance are mandatory or optional?

We Answered:

It will depend on the lender but industry practice is to require insurance with less than 20% down.

Georgia Said:

Why did i pay default insurance on my mortgage?

We Answered:

I have never heard of a "default Insurance thing" you need to use big boy words so that we understand.

It may be PMI (private mortgage insurance), since you put less then 20% down.

Who has the mortgage (loan) on the property.

The problem is, fraud was committed here and YOU KNEW ABOUT IT. I'm guessing you don't have much recourse. It shoulds like you were trying to screw the lender and in return got screwed yourself. Pay back is a bit*h.

Jimmy Said:

Why not simply require default insurance on mortgages?

We Answered:

Barry doesn't want us picking on the underprivilaged like that. You racist!

Jaime Said:

What is Privet Mortgage Insurance?

We Answered:

Depends on what they mean by mortgage default insurance.

Typically, PMI, is required for a loan to be marketable - if the buyer has less than 20% equity in the house, they are required to buy it. It pays the LENDER, and only the lender, AFTER the house is foreclosed on, the difference between what the house brings at auction, and the mortgage balance.

It keeps the lender from being "upside down" on the loan, if the buyer stops paying.

Wayne Said:

Does Private Mortgage Insurance compensate the Banks if you default on your Mortgage?

We Answered:

Private mortgage insurance only covers the first amount of debt you have to be at 80% loan to value. This means that is you put 10% down, the PMI only covers the other 10%.

Don't be confused about the banks that foreclose. They all lose money in the deal, otherwise none of the banks would have failed. In addition to the loan amounts not collected, the lenders also have to hire lawyers and pay court costs to foreclose adding to the original debt.