Short Sale Report - Old Republic Mortage Insurance

The five largest MI companies have recently been downgraded. They could become increasingly difficult to work with since their is no incentive to solve the problem early. If they approve a short sale now as opposed to cover the loss at a later date with a trustee sale they may choose to wait to take the loss. Although not really a "lender" mortgage insurance (MI) companies like Old Republic may have a stake in the Short Sale at least on covered loans. We are talking, in most cases, about MI coverage that was purchased, or paid for, by the beneficiary (lender) - we are not talking about traditional borrower paid mortgage insurance. Old Republic generally demands 20% of the outstanding lien (usually it's the junior lien) from the borrower. On occasion, we have been able to satisfy Old Republic with an unsecured note. It gets difficult when the demand for recovery is on a purchase money obligation. Because, the borrower would likely have no obligation for the debt after the foreclosure, at least in CA.