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As we all know, mortgage insurance companies are helping banks and homeowners avoid foreclosure. Surprisingly as it sounds these mortgage insurance companies will even put some of their own money to help homeowners make their mortgage payments.1. Why do mortgage insurance companies are willing to put their own money?2. How can we know if we are insured by these insurance companies?3. Why are these big corporations helping banks and homeowners?4. Will the insurance companies help the homeowners also if they are not insured?Many homeowners are not knowledgeable about their loans. Some people dont even know their own Interest rate; therefore, I will assume that most of you do not understand the term PMI (Private Mortgage Insurance).What is PMI?With a Private Mortgage Insurance, banks act as the beneficiary and borrowers make a monthly payment for the insurance. PMI (Private Mortgage Insurance) protects banks from foreclosure or short sales...When do you pay PMI?When you buy or refinance a house, you need to be aware of the loan to value, referred herein as LTV. If your loan has 80% or more LTV, most likely you will pay PMI. Remember when you could take a first loan for up to 80% of the value of the property, then a second loan to cover the reminding 20%? Well, those days are over. Today, banks want you to make a big down payment, therefore, you will have more of your own money invested in the property and they will feel more secured. The big down payment banks are asking you to put down is considered the PMI.It might sound to you like the insurance companies are only protecting banks. That is not true, insurance companies are also protecting you, the homeowner. As I said before, insurance companies will partner with credit counseling agencies to help homeowners make their payments.Insurance companies will contact you over the phone or via regular mail to give you information about different websites where you will find information about what to do to save your home from foreclosure. The most important step you need to take to save your home from foreclosure is to contact your lender. The lender should be able to guide you through the process of saving your home.This process is easier than you think. You just need to get started and you will be on your way to saving the biggest investment of your life.
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