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If you bought a house with no money down, you are definitely paying PMI. What is PMI ? Private mortgage insurance. Lenders are INSURED by insurance companies for any loss they may sustain from a foreclosure. California has it really good ! They can walk way and the bank cannot come after them for the difference (loan 250K but house sold only for 200K...50K difference). But guess what ? In ALL states.....if you pay PMI and only have one mortgage...and you foreclose, the bank should not go after you for the difference since they would be covered for the loss because of the PMI you were paying. Just a little tip !
If you bought a house with no money down, you are definitely paying PMI. What is PMI ? Private mortgage insurance. Lenders are INSURED by insurance companies for any loss they may sustain from a foreclosure. California has it really good ! They can walk way and the bank cannot come after them for the difference (loan 250K but house sold only for 200K...50K difference). But guess what ? In ALL states.....if you pay PMI and only have one mortgage...and you foreclose, the bank should not go after you for the difference since they would be covered for the loss because of the PMI you were paying. Just a little tip !
Oh hurray! Let's all just dump our properties and forget about who pays for it in the long run! Abnegation of personal responsibility for everyone! Hurrayyyyy!!!
PMI has different coverages....not all PMI covers the difference in loss.
Quote:
Originally Posted by heydade
If you bought a house with no money down, you are definitely paying PMI. What is PMI ? Private mortgage insurance. Lenders are INSURED by insurance companies for any loss they may sustain from a foreclosure. California has it really good ! They can walk way and the bank cannot come after them for the difference (loan 250K but house sold only for 200K...50K difference). But guess what ? In ALL states.....if you pay PMI and only have one mortgage...and you foreclose, the bank should not go after you for the difference since they would be covered for the loss because of the PMI you were paying. Just a little tip !
Many of these insurance companies are now having problems - that's what all this renegotiation of AAA credit ratings has been. The securities (mortgage bundles) turned out to be riskier than they thought - which means the insurance companies need to have more cash on hand to cover them (required by law) - but don't/can't come up with it - so now insurance companies who cover financials are in serious trouble..
If you bought a house with no money down, you are definitely paying PMI. What is PMI ? Private mortgage insurance. Lenders are INSURED by insurance companies for any loss they may sustain from a foreclosure. California has it really good ! They can walk way and the bank cannot come after them for the difference (loan 250K but house sold only for 200K...50K difference). But guess what ? In ALL states.....if you pay PMI and only have one mortgage...and you foreclose, the bank should not go after you for the difference since they would be covered for the loss because of the PMI you were paying. Just a little tip !
Come down from your high horse and take a look at PMI people are paying: the coverage is not for the entire value of the loan so if someone has crazy high LTV and walks away, both the lender and the MI company are screwed. The lender then has to sell the house to recoup losses if it can even sell the house for the entire difference. Your little tip is a misguided in a big way.
No, most of the loans that are going into default now did not require PMI. It was no money down, negative amortization, interest only, you name it AND no PMI so that you can save even more money! Woo-hoo.....so now we have the mess that we have and people are walking away. I mean, if the banks sue these people, most of them don't have any money to go after anyway. It's such a mess. it's unbelievable. But i don't feel bad for the banks. they were playing Russian Roulette giving out those LIAR loans. You reap what you sow.
Do you really believe that the banks will lose in the end. What if say the banks go under.how does that effect the economy and future lending?Do you think that in the future that it would effect all loans? Will anyone want to loan money to those that went into foreclosure Will it not make those who have proven responsibilty more likely to be the ones that get the best terms.It's the same with credit cards or anything else;your history will follow you.
I agree texdav, but the banks will take a hit as well....and I have to believe that companies that offer credit like credit cards ect. will be looking at this new group of people for business in the next 5-10 years...I mean think about it...there's probaly going to be millions of people that foreclosed on their homes this year...but I think these people should also have to go through some financial planning training honestly
I see estimates of 1% of home owners likely to be foreclosed. In the end that 1% will see all their future credit having low limits and high interest. I am sure just like the banking crisis many banks will go under and some of them investor banks. But there will be winners and losers in the banking industry. I feel sorry for those employees of banks that will lose their jobs that had nothing to do with the loan decisions.
Do you really believe that the banks will lose in the end. What if say the banks go under.how does that effect the economy and future lending?Do you think that in the future that it would effect all loans? Will anyone want to loan money to those that went into foreclosure Will it not make those who have proven responsibilty more likely to be the ones that get the best terms.It's the same with credit cards or anything else;your history will follow you.
I understand what you're saying, but I respectfully disagree. Foreclosure may be looked at NOW as a black eye, but it's going to be a badge of honor in the near future. They'll know that you weren't a sucker to lose a lot of money on a down payment. FICO will become increasingly irrelevant, and as the fad of securitization of mortgages goes bye byes with the end of Freddie and Fannie (OH YES, they can go under), we'll see a re-emergence of local lending and prudent standards that aren't based on a central database.
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