Help me figure out this short sale!!!!!!! What is the PMI company thinking.
This is an interesting scenario concerning a short sale that Jeff Payne in Panama City Beach came across and posted about in a short sale that deals with PMI. I've heard of similar things happening and have even heard of lenders that would rather just let the property go to foreclosure since it has mortgage insurance.
We personally have not come across this for Las Vegas Short Sales that we have done for the mere fact so many people in Las Vegas used creative financing such as 80/20's to avoid PMI in the first place. This one is quite interesting and I'll be following any follow ups by Jeff to see what happens.
Paul Francis, CRS
Las Vegas Short Sales
702.592.3058
I just got an approval for a short sale, providing the seller sign an unsecured note. Here are the details.
The offer was for $165,000, normal closing costs paid by each party. The BPO came back at $170,000 and the home has been vacant for several months. The lender claims that they are OK with their NET amount but the Private Mortgage Insurance Company wants a $67,000 unsecured note paid over time. The seller has no money, they can't even pay their monthly expenses without this mortgage, they are FLAT BROKE and their financials show it. A job loss and relocation to another area forced the hardship.
Their original mortgage was for $214,000 and the PMI company insured 20% of that which is $42,800. How can the PMI company ask for $67,000 which is more than what they insured? If the seller had that much money, we would not be short. The lender claims to be powerless with the PMI company.
What are they thinking, why don't they try to get what they can and sell the home. When the property goes to the foreclosure sale next month, the PMI company will get NOTHING. The lender will have a depreciating property that is falling into disrepair. They will then discount the home even more just to sell it.
Can anyone figure out this situation or are the PMI companies just that stupid?
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