When bank sells a foreclosure house, after pmi paid to bank, does it have to pay pmi back?bank keeps profit?
Question:
Answer:
Bank keeps it. When a home is sold in a foreclosure they usually don't get the total amount that is owed. PMI is insurance for these such reasons. If there is still a balance on the loan after the home is sold, the bank will go after the borrower.
No, the bank can only be made whole. That is, it cannot turn a profit from your foreclosure. However, there may be more people in line for money than just your bank.
PMI is just insurance that you carry in the instance that you fail to make payments and it goes into foreclosure.
When I say that there may be others in line to be paid, the Real Estate taxes will always be paid first. North Carolina is a "pure race" state which means whoever files with the courthouse first gets paid next in line. So while it may seem that the bank keeps the extra, that is indeed not the case. It is illegal.
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