[Packrat1]

Recently I inquired about any new programs for financing regarding my existing home loan in Vegas. We bought about a year and a half ago. My loan officer said that even though we declined the PMI private mortgage at the time of our loan, the bank bought it behind our backs (and paid for it themselves) and never told us. I only found out when asking now about any re fi options.

Because of this I was ineligible to take advantage of some of the Government refinance programs due to the Bank purchasing PMI.

Would a Bank be more generous in accepting a short sale situation knowing that they would get the difference back via PMI or would it not matter?

[Daddys///M3]

Originally Posted by Packrat1

Recently I inquired about any new programs for financing regarding my existing home loan in Vegas. We bought about a year and a half ago. My loan officer said that even though we declined the PMI private mortgage at the time of our loan, the bank bought it behind our backs (and paid for it themselves) and never told us. I only found out when asking now about any re fi options.

Because of this I was ineligible to take advantage of some of the Government refinance programs due to the Bank purchasing PMI.

Would a Bank be more generous in accepting a short sale situation knowing that they would get the difference back via PMI or would it not matter?

Something doesn't make sense here. It is not up to you to carry PMI or not. If the loan to value guidelines require it, it's required, period. You cannot choose to opt out. What may have happened is that your loan officer may have originated a loan with lender paid mortgage insurance (LPMI) and as such the rate and rebate or points would be different from base pricing. If this is the case, your LO had full knowledge of it as should you. Do you have your mortgage paperwork? Did you sign a PMI disclosure? All of your information should be in there, but I have honestly never heard of a bank attaching PMI behind a borrower's back, and to be honest I would think that it would be illegal (just speculation though as I am not really willing to look into the legalities of it).

That said, I would imagine that PMI would likely not make much of a difference to the lender at this point. Depending on how much value your home has lost, there is still the potential for the lender to be on the hook for a substantial amount even with PMI, which of course would not be good for there balance sheets.

[Packrat1]

Checked my loan documents and we did not have to pay PMI. Our loan was a no fee no pmi loan. (of course there always are fees....) Perhaps the loan officer I spoke to recently meant the bank bought "LPMI" as opposed to PMI. Neverless, their purchasing LPMI or whatever it's called thwarted us from being eligible for one of the Federal programs. Apparently a loan with some sort of mortgage insurance doesn't qualify for Federal Mortgage Modification plans. Here is some of the language I found on the governmentrefinanceassistance.com website which stated in part. Quote; 2. A “Homeowner Affordability and Stability Plan/ Home Affordable Refinance” — With President Obama’s new plan qualified homeowners can refinance a conventional first mortgage for up to 105% of the current value of the home (soon to be 125%). However this program does not work well for people who have second mortgages, credit scores below 680, or who currently pay mortgage insurance (PMI).

[007 license to sell]

Originally Posted by Packrat1

Checked my loan documents and we did not have to pay PMI. Our loan was a no fee no pmi loan. (of course there always are fees....) Perhaps the loan officer I spoke to recently meant the bank bought "LPMI" as opposed to PMI. Neverless, their purchasing LPMI or whatever it's called thwarted us from being eligible for one of the Federal programs. Apparently a loan with some sort of mortgage insurance doesn't qualify for Federal Mortgage Modification plans. Here is some of the language I found on the governmentrefinanceassistance.com website which stated in part. Quote; 2. A “Homeowner Affordability and Stability Plan/ Home Affordable Refinance” — With President Obama’s new plan qualified homeowners can refinance a conventional first mortgage for up to 105% of the current value of the home (soon to be 125%). However this program does not work well for people who have second mortgages, credit scores below 680, or who currently pay mortgage insurance (PMI).

What I have had lenders tell me that banks don't get paid on mortgage insurance when a property is a short sale, that it has to go into foreclosure before the insurance is paid. That is another reason why banks don't respond to short sales in a timely matter and why short sales usually end up foreclosed on. Only properties without PMI usually have a successful short sale. Most properties sold in the past wrote 1st and seconds to get around PMI , because a primary loan must be 80% to not have to have PMI.