why are the Banks and mortgage companies crying about loses when all the home loans have mortgage insurance?
I dont see why they have loses, its the insurance companies that are losing. The Bank collects on the default loan and have the houses too!
Actually, insurance companies have insurance. Ever hear of reinsurance? I know, it pissed me off to learn that as well. None of them are really losing which is why they keep getting richer. Did you know insurance takes about 12% of your net income? Auto, health, dental, life, unemployment, etc.
Also, the properties that don't have PMI are the ones where there is 20% I believe already paid up. That's why the PMI goes away since there is enough to recover from factoring in the house, insurance, etc., etc. It's a whole numbers game, but don't believe that the banks lose out. They've been practicing the art of banking for hundreds of years, you've been doing it for like ten? Whoever thinks the banks will lose on more than a tiny fraction of deals is in la la land.
Many companies don't do PMI (private mortgage insurance) unless the borrower is an exceptionally bad risk.
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Thats not true.
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That isn't true, which is why the insurance companies are not folding.
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I don't believe you have a clear picture of how mortgages work. Not all mortgages have PMI. The bank uses the property as collateral for the loan. When the property value goes down, it is possible that the loan amount exceeds the collateral value. There are costs involved in REO (bank owned) properties too.
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Oregon Realtor
Actually, insurance companies have insurance. Ever hear of reinsurance? I know, it pissed me off to learn that as well. None of them are really losing which is why they keep getting richer. Did you know insurance takes about 12% of your net income? Auto, health, dental, life, unemployment, etc.
Also, the properties that don't have PMI are the ones where there is 20% I believe already paid up. That's why the PMI goes away since there is enough to recover from factoring in the house, insurance, etc., etc. It's a whole numbers game, but don't believe that the banks lose out. They've been practicing the art of banking for hundreds of years, you've been doing it for like ten? Whoever thinks the banks will lose on more than a tiny fraction of deals is in la la land.
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Many banks insure their own mortgages.
They make you pay for mortgage insurance, and add it to the bottom line.
When homes are going up in value, this is pure profit as no one in their right mind would let a home go back to the bank that just went up $50,000.
Hope this helps.
Terry S.
http://www.Welcome2Arizona.com
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They have a house which has a mortgage on it that is more than what they can sell it for. This could be a 20, 30, 40,000 loss… Believe me, it's not a gold mine the lenders have. It's not profitable for them and they'd rather you make your payments so they can make the interest. http://www.choicefinance.net/
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