private mortgage insurance, why didn’t it help in this crisis?
by Mortgage Rates on Wednesday, October 27th, 2010 | 1 Comment
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Unfortunately the vast majority of the loans that were structured in the most recent sub prime market that ended up at the center of this fiasco were structured in such a way as to not have PMI. Basically PMI is required anytime you obtain a mortgage for more than 80% of the balance. So if you put down less then 20% down then you were required to have PMI. However, under the loan conditions that were in this market you could obtain a 2nd mortgage for the 20% and thus not have to have PMI. Hence the private mortgage insurance program has not been as involved as it would have been in times past.
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