Are you in a financial dilemma regarding your delinquent home loan? You have thought about options - foreclosure, short sale, or just walking away. Perhaps the options have financially racked you. Repeatedly. There is yet one other option to look at before you do any of the above.
If you have a mortgage loan of 81-100% LTV (loan to value) you may want to consider speaking with your Private Mortgage Insurer. The PMI(Private Mortgage Insurance) provider has guaranteed the bank/mortgage lender that if you don't pay the bank/mortgage lender, they will reimburse the bank its losses after the foreclosure. The bank, not the borrower, is the beneficiary. If all sides agree to sell the house for less than the loan balance (short sale) the PMI provider will then pay the bank the amount of the bank's loss.
As long as you originally took out only a first mortgage loan for more than 80% of the original appraised value you may be able to construct a work out plan through the PMI provider and your bank/mortgage lender. You may contact your PMI provider directly. If you are currently delinquent they may have already contacted you. Two major companies that provide PMI are MGIC and Genworth. If you have PMI and are paying premiums but you don't know the company name you can review your closing statements or call your bank/mortgage lender to find out which company you pay. These companies are very interested in reducing their financial losses. Some have taken the following positions to reduce their losses.
1) Seek a lump sum payment from the borrower. (Seldom a viable option for the borrower.)
2) Try to fashion a plan for the borrower to repay the past due amount within a year or 18 months.
3) Discuss modifying the mortgage by changing the rate or the final payoff date or even forgiving some debt.
4) If none of the above options work the homeowner will have to proceed with a short sale, foreclosure or returning ownership to the bank.
Genworth recently introduced its first "foreclosure prevention scorecard" a quarterly report about its loss-mitigation efforts. The insurer worked directly or indirectly with 2,871 borrowers in the first three months of this year, and 2, 613 worked out deals to remain in their houses. A little more than half of the delinquent borrowers got repayment plans and 37 percent got mortgage modifications. 1
Before you throw in the towel check to see if PMI premiums are included in your mortgage payment. If so, check in with the PMI provider and see if there are any other options available.
This is one last option you must address. PMI providers are ready to address your situation today!
1 Bankrate.com - Mortgage Insurers try to reduce foreclosures.
Posted by:
Jerry Troyer
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