Private Mortgage Insurance Paying Underwater Borrowers
PMI Group, a private mortgage insurer, has announced that it will be paying some borrowers cash to stay in their homes. The goal of the program is to prevent mortgage defaults, which naturally cost the insurer.
Through its subsidiary, Homeowner Reward, borrowers who are underwater on their homes and choose to participate in the program will receive cash incentives of between 10% and 30% of their outstanding principal balances. The catch? Borrowers must remain current on their mortgages from between 36 and 60 months.
Homeowners interested in the program may visit the Responsible Homeowner Reward page at www.rhreward.com.
What is private mortgage insurance and do you have it? Private mortgage insurance offsets the losses to mortgage companies when a borrower defaults. Often when homeowners purchase a home with less than 20% down the primary mortgage company will require that the borrower obtain private mortgage insurance. Some buyers have avoided private mortgage insurance by taking out multiple loans–the most common of which is an 80/20 loan. If you are unsure about whether you have private mortgage insurance and/or would qualify for this program, contact your lender.