how long does private mortgage insurance pay out for

[nota]

why the house next door was sold in 06 at the local peak of values
with in a year the owner left it then kids set a fire there
the bank BoA will not foreclose or admit they ''own it''
they keep title in the buyers name and collect the PMI
so they are getting paid as are the taxes

it is boarded up and minimal yard work is being done
inspectors say it is a near total loss but not reasonable to repair
in the current market repair costs would exceed the sale value

I would like to buy it and tear down the house
but the bank BoA claims they do not ''own it''
my guess is the PMI is paying them for the last 5 years

so how long will this go on ?
or how long does the PMI pay out for ?
I have tryed repeatedly to get any info from BoA
but they are not forthcoming at all [ stone wall ]

I figure the value at land value minus the cost of tear down and disposal

[Rick Lee]

Figure the mortgage insurance policy was based on the original financed amount with declining balance. So whatever was owed when they stopped paying is probably around the amount left on the policy. If the PMI is paying the bank monthly, this could probably go on for many years. If they paid a lump sum, it should be done with and the bank is just keeping it on the books to not (yet) show it as a loss. Is there an HOA to light a fire under someone?

Edit: Since you only need PMI on the amount financed above 80% LTV, that dollar amount might be the policy limit, which means it could run out a lot sooner.

[HardDrive]

It would be a damn shame if some took a big wad of rags soaked in Penofin deck stain, and put them in a plastic bag, and tossed them inside.

[BernieP]

Similar situation with a house across the street from me. The neighbors complained to the boro and got the house condemned. The mort. company had to fix it or tear it down. They chose to demolish it.

Bernie P

[nota]

no there is not a HOA thankfully
I would not buy a property in one
while this maybe a rare good case for one
the problems and interference of a HOA I think exceed the worth of one
plus they all want to fee you in addition to the BS power trips

we were just county when I bought
but about 7 year ago we became a city
I have contacted the city who forced the board up and limited yard work
but as the mayor is a mortgage broker
the city is not inclined to force the bank to do anything drastic
like fix or tear down the house

but what I am trying to find out the term / life of the PMI payments
am I looking at a 30 year life of this ? [to match the original mortgage ?]
as I strongly suspect as long as the PMI is paying nothing will happen

[Rick Lee]

You can probably dig up the deed and lien at the recorder's office and do the math backwards from there.

[MBAtarga]

All it takes is a Dorito chip lit and placed against a wall underneath an outlet. No accelerant needed, and looks just like an electrical fire to investigators. (Or so I've been told.)

[Hugh R]

Linseed oil on a rag

[nota]

it is CBS so fire will not help much
we do not stick build much here in hurricane country
and already part burned too

I never had a mortgage or PMI myself
as I buy for cash or don't buy it

I suspect BoA did not make that loan but bought a failed bank/loan CORP's
as I have tryed several branches and their main mortgage office too
and it is not on their computer ''books''

[john70t]

Since nobody owns it, why not start an eminent domain claim?
California Towns Might Use Eminent Domain To Seize, Restructure Underwater Mortgages

Lite a fire under some butts, or get the house for free (cavaete: free may include back taxes)

[nota]

found out BOA tryed to start the foreclosure last year in nov but missed the court date

city/county are finally trying to condemn and raze the house in 2014
was to go in jan but the power corp still had wire to the house dead but still in place

late june 14 they started to tear-down but stopped due to the wires pole to house
that finally was done and the house is gone now
to be a city mini tot park or something like that

only 8 years to get it gone !!!!!!!!!!
still never figured out the mortgage ins deal
or if BOA foreclosed
but city grabbed the lot for the tear down costs
and is now semi empty with trees and bushes

so now begins the battle with the city to maintain/improve the now empty lot
bet that is not quick or eazy
but a mini park is better then a burned abandoned house

[legion]

Plant a garden there. Mow it. Claim adverse possession.

[porsche4life]

Not ideal, but still I would say a net improvement to the neighborhood...

[nota]

community garden may be fun and quieter then a tot lot

so a good idea

[Rot 911]

Originally Posted by legion

Plant a garden there. Mow it. Claim adverse possession.

In most states you can not acquire publicly owned or government land by adverse possession.

[ckelly78z]

I'm pretty sure that 20% equity came to pass, the PMI stopped paying, and the bank gave up and figured they better tear it down, and cut thier losses.

[Eric Coffey]

Most PMI policies will payout claims to their insured (the lender) in a lump-sum, post foreclosure.
The polices typically cover/reimburse a fraction of the outstanding loan balance (say 30%-40%) PLUS associated expenses and carrying costs the lender incurred during the foreclosure process.



Here is scenario to consider:

Let's say a borrower buys a house @ $600k with only 10% down (90% LTV, initial loan balance of $540k, requiring PMI). He then defaults on it 2 years later with an outstanding balance remaining of $520k.
The foreclosure process takes 6 months. It is now an underwater asset and goes back to the bank at the trustee sale. The PMI company pays out a claim of 40% of the outstanding balance to the lender which comes out to $208k, plus all of the carrying costs and legal fees associated with it during the 6 month foreclosure process. Let's just call that an extra $32k, for a nice round total claim payout amount of $240k.
The lender retains title to the property and liquidates it via REO disposition, netting $440k after paying listing/selling fees.

That is a total net to the lender of $680K for something that only cost them $540k to begin with. Nevermind the government subsidies, or any tax deductions the lender enjoys from the associated "losses" from foreclosure.

That may be an extreme example, but scenarios like the one above demonstrate how America got (and is still getting) screwed by institutional lenders, PMI, and the goons on Wall St. that sling the securities in which they are pooled. Just my $.02.

[nota]

Originally Posted by ckelly78z

I'm pretty sure that 20% equity came to pass, the PMI stopped paying, and the bank gave up and figured they better tear it down, and cut thier losses.

house sold for 305 at the very peak
not sure if 80% of value was/is adjusted as price fell to
maybe 130k at bottom maybe less on quick dump at very bottom
now the other side house sold for 235k a month or 2 ago

[Eric Coffey]

Originally Posted by Rick Lee

Edit: Since you only need PMI on the amount financed above 80% LTV, that dollar amount might be the policy limit, which means it could run out a lot sooner.

That's how you would think it works or should work, but no; at least not on the PMI policy beneficiary/term docs I've seen. Those were for "flow" policies, so things might be different for the other types of PMI policies (although, I believe the flow policies are the most common, in which the borrower pays the premiums but the lender is the beneficiary).

The ones I've seen have specified coverage on the entire remaining balance that the borrower skipped out on (principal and interest), just at different percentages. Coverage also extended to any carrying costs the lender incurred during the entire foreclosure term (to include property upkeep/utilities, rehab/repair, taxes, legal fees, and all other expenses). It's a racket.

[nota]

Originally Posted by Eric Coffey

Most PMI policies will payout claims to their insured (the lender) in a lump-sum, post foreclosure.
The polices typically cover/reimburse a fraction of the outstanding loan balance (say 30%-40%) PLUS associated expenses and carrying costs the lender incurred during the foreclosure process.



Here is scenario to consider:

Let's say a borrower buys a house @ $600k with only 10% down (90% LTV, initial loan balance of $540k, requiring PMI). He then defaults on it 2 years later with an outstanding balance remaining of $520k.
The foreclosure process takes 6 months. It is now an underwater asset and goes back to the bank at the trustee sale. The PMI company pays out a claim of 40% of the outstanding balance to the lender which comes out to $208k, plus all of the carrying costs and legal fees associated with it during the 6 month foreclosure process. Let's just call that an extra $32k, for a nice round total claim payout amount of $240k.
The lender retains title to the property and liquidates it via REO disposition, netting $440k after paying listing/selling fees.

That is a total net to the lender of $680K for something that only cost them $540k to begin with. Nevermind the government subsidies, or any tax deductions the lender enjoys from the associated "losses" from foreclosure.

That may be an extreme example, but scenarios like the one above demonstrate how America got (and is still getting) screwed by institutional lenders, PMI, and the goons on Wall St. that sling the securities in which they are pooled. Just my $.02.

I am missing why the PMI Corp does not take title for the payments they make
and in a falling market how 80% of fair market value can be achieved

I would love to see the players books on this deal
but in the end
the bank lost the title to the city for the demo costs

btw in a odd note the bank paid minimal lawn crew
ie one guy with a weed wacker came by today
looking very puzzled at the now missing house
I wonder if the bank ever foreclosed or knows the house is gone
and the land forfeit for the demo and haul&dump costs