Remember PMI? You know private mortage insurance. People paid Billions and Billions of dollars into these policies. It's been going on as long as I remember, at least 40 years.
What was it's purpose? Well, to protect the lender...
Private Mortgage Insurance (PMI) is insurance that protects your lender against non-payment should you
default on your loan. It's important to understand that the primary and only real purpose for mortgage
insurance is to protect your lender—not you. As the buyer of this coverage, you're paying the premiums, so
that your lender is protected. PMI is often required by lenders due to the higher level of default risk that's
associated with low down payment loans. Consequently, it's sole and only benefit to you is a lower down
payment mortgage.
O.K. fair enough. But what happened when the first large scale collapse happened?
Did this insurance pay off the banks? I can't seem to get an answer on this.
No one seems to know what happened. At first people told me it didn't apply to sub-prime but I found out that it did. Then of course there is everything besides sub-prime that was covered.
Just another scam or yet to hit?
b.
What was it's purpose? Well, to protect the lender...
Private Mortgage Insurance (PMI) is insurance that protects your lender against non-payment should you
default on your loan. It's important to understand that the primary and only real purpose for mortgage
insurance is to protect your lender—not you. As the buyer of this coverage, you're paying the premiums, so
that your lender is protected. PMI is often required by lenders due to the higher level of default risk that's
associated with low down payment loans. Consequently, it's sole and only benefit to you is a lower down
payment mortgage.
O.K. fair enough. But what happened when the first large scale collapse happened?
Did this insurance pay off the banks? I can't seem to get an answer on this.
No one seems to know what happened. At first people told me it didn't apply to sub-prime but I found out that it did. Then of course there is everything besides sub-prime that was covered.
Just another scam or yet to hit?
b.