Borrowers who had to spend a little extra to purchase mortgage insurance (MI) on behalf of their new lender because they didn’t have a big enough down payment may now find that extremely worthwhile. Especially if they get behind and need some help with lender intercession, that MI company could be your best friend.
One of the biggest obstacles for first time borrowers is the enormity of a 20% down payment to avoid mortgage insurance. Very few can easily achieve that without the help of relatives in the form of a gift. The answer is typically a smaller down payment and some form of private mortgage insurance (PMI) if it’s a conventional loan or FHA insurance or a VA guarantee if it’s a government loan.
Most borrowers who have mortgage insurance coverage on their loans have no idea who their insurer is, or even what it is all about. But, if they ever get into trouble with the payment on their mortgage the MI company could become a worthy ally in dealing with the lender.
Mortgage insurance was always thought of as the insurer protecting the lender’s interests. That has changed with the reality of the current market. The alignment of the interests of the mortgage insuring company and the borrower has become prevalent. No one wants to see any more borrowers fail. If there is a way to accommodate a specific need then the insurer can become the borrower’s best friend in negotiations with the lender.
MI companies have been front and center over the past several years helping borrowers with workouts and modification. Should you happen to get into trouble you’ll be in a much better position getting your mortgage insurance company involved in your behalf.
Even if there is no way for the borrower to ride it out with a modification the MI companies have been assisting them with cash payments for transition and relocation during the move out.
One MI company has “more folks in loss mitigation than anywhere else in the company right now.” And unlike lenders, once you are assigned to a MI individual, they will stick with you throughout the whole ordeal. A total analysis is completed to find a solution that is viable. And MI companies are willing to throw some money at a modification in lieu of having to pay off a total loss. Insurers look at it as an advance on the investor’s eventual claim and are glad to pay a smaller amount up front.
If you’re a borrower who is having trouble making a payment do not hesitate to contact your mortgage insurance company. If you don’t know who that is or whether you have it, call us. We’ll help you find the information.
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