Question about short sale and possible foreclosure (PMI, loan, approval)

[susan71379]

i have an offer in on a short sale that the bank has approved, but now the pmi company are asking for 25 thousand more or they are going to foreclose on the house - what should we do?

[howard555]

Originally Posted by susan71379

i have an offer in on a short sale that the bank has approved, but now the pmi company are asking for 25 thousand more or they are going to foreclose on the house - what should we do?

I thought a short sale to a buyer:
A. Had to be approved by the bank that was preparing to foreclose.
B. And had to be approved by the home owner, who was about to be foreclosed on.

Why is a PMI involved?

[Debsi]

Cause they guaranty the loan and will pay out a claim to the mortgage company equal to a certain percentage of the loss incurred on the loan. Apparently the claim they will pay out on a foreclosure is less than the claim they will pay out on a short sale. Therefore if the pot for them isn't sweetened by $25,000, they are not going to approve a short sale. The mtg company has to go by their short sale approval conditions or they will not receive a mortgage insurance claim check.

[NinaN]

Is the home worth an additional $25K to you? If so, agree. If not, don't.