what happens if you default on a loan with mortgage ...

Submitted by astriddge from AZ - 01/04/2009 - 3:32pm

what happens if you default on a home loan with mortgage insurance? does it affect your credit? do you go through the entire foreclosure process? does it change the process? does having mortgage insurance make it more or less likely that you can get a loan modification or a short sale?

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Submitted by Sean - 01/04/2009 - 9:13pm

Keep in mind that mortgage insurance isn't there to protect you, it is there to protect the lender. No difference in process, or impact on credit, only real change is that MI company will likely have to approve any short sale and anecdotal evidence suggests that the mortgage insurance companies are more difficult to get short sale approvals from then the lenders.

Submitted by mortgage - 03/04/2009 - 2:01pm

Thanks for the answer, Sean. I had no idea that mortgage insurance protects the lender not the renter. What happens if there isn't an insurance? How can the lender get hurt?

Submitted by non recourse mortgage - 03/23/2010 - 11:36pm

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non recourse mortgage

Submitted by bobinspira - 04/03/2010 - 11:25am

In my experience, mortgage insurance is another 'layer' in the short sale approval process. As Sean has mentioned, the MI is there to protect the lender - it is simply insurance against a buyer default.

So, when we process a short sale, we are dealing with the Servicer (ie BofA or Wells, etc) - then the Investor is the decision maker since its their money (typically a mortgage pool) - then the MI is there to protect the investors lose. In some cases, MI is simply part of the process and in other cases the MI companies have forced the foreclosure vs allowing the short sale. Things have gotten better, in that, I've seen more MI situations simply resolve itself.

Bottom line is that each situation is unique and its best to make sure you are working with an experienced person who has completed lots of short sales and works with a team. As a CDPE having completed many short sales, working with a lawyer and a group that has processed over 1,000 short sales, we then are able to understand what are the realistic actions for a distressed homeowner.

If you want specific advice, send me an e-mail briefly describing your situation. Right now, its important to know your options up front, so that you can make the best decisions for you and your family.

BOB, MBA, CDPE
bob@inspiragroup.com

Submitted by Sahara - 01/09/2011 - 9:40pm

The article you posted about mortaging is interesting.

Sahara
tryvod.com

Submitted by Latest Tech News - 01/14/2011 - 5:45pm

Great info!
I found your web page on google and it seems to have what I've been looking for. Here's another source that worth a look about this also. Thanks for sharing!

Patricia
Breaking News
www.techblog.ws

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