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Roberto Said:

why do banks charge fees for mortgage insurance?

We Answered:

The fee for mortgage insurance is because the bank is taking on more risk if your down payment is not enough (less than 20% down payment). They want some assurance that they will get their money if you do not make your payments. The 20% cushion is because there are other legal fees involved in foreclosure, and prices can fluctuate, especially since they would likely get less at a foreclosure auction than if they had more time to sell it normally.

Kurt Said:

why is my mortgage company forcing me to buy insurance on my home?

We Answered:

As stated by the other responders, your lender wants to make sure their collateral is covered for damages. One other type of insurance that your lender requires is Private Mortgage Insurance, or PMI. This coverage doesn't cover you or your home at all. It insures the lender against a default on the loan. PMI is required any time you have less than 20% equity in your home, so if that is the case, pay your loan down to less than 80% of your home's value to save yourself this expense. Also, keep in mind that it's in the lender's best interest to have PMI in place, so they won't cancel it until you tell them to do so.

Shane Said:

Why is PMI (Principle Mortgage Insurance) not saving the mortgage system? ?

We Answered:

I suppose those people never got PMI on their loans.

Patricia Said:

Why do you have to pay Mortgage Insurance on top of Home Insurance??

We Answered:

Mortgage insurance protects the lender from you defaulting on the loan.

Home insurance protects you if the house burns down or if someone is hurt on your property.

All FHA loans have mortgage insurance, regardless of $ down. Why? That is the guideline you must comply with to make use of their $.

Same thing with Fannie/Freddie $ (except you can get rid of MI if your house appraises higher later on) above 80% LTV.

Best of luck!

Jerome Said:

why is house insurance double every month by the mortgage company?

We Answered:

If what they are doing is holding an escrow account for you then this would mean that the escrow account just keeps getting larger and larger. Eventually they would need to give this excess money to you- in the meantime it is a forced savings account with no interest being paid (the interest rates are very low right now anyway).

If you are buying insurance thru Greentree in addition to the mortgage then your argument might be with the insurance commission in your state.