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Let’s Eliminate PMI-As-We-Know-It

Started by cordblomquist · 9 months ago

Borrowers who put less than 20 percent of a home’s value down for a mortgage almost always have to secure “private mortgage insurance” (PMI) to protect their lender if they default. In 2007, PMI became became tax deductible for borrowers, thus further lowering the cos ... Continue reading »

5 comments

  • Allen

    9 months ago

    My gut reaction is it feels like you're arguing to eliminate auto insurance because it gives people incentive to drive poorly.

    More so, the idea that "if just somehow the people who made the loans kept them and made all the decisions about them" would make things better.... it would. If you consider 19th century banking an advance.

    It's too bad we won't know given how that the market isn't have to cope with a lot of the pain of the mess they were involved in. I suspect that without govt tinkering not only would they have not gotten in so deep but coming out they would've found better ways of measuring risk and more so, better ways of spreading the risk.
    reply
  • Tom Hanna

    9 months ago

    PMI is not the problem. Most of the worst subprime loans didn't have it anyway and lots of loans with PMI are doing just fine. (Well, frankly, I suppose that could be said of mortgages generally, though.) I suppose in some cases PMI could be a problem if a lender let it be a substitute for good underwriting, but that just points to the real problem - bad underwriting.
    reply
  • Annie Gourieux

    9 months ago

    When I got my home loan the mortgage officer messed up and placed MI on my home loan. I tried to get it removed and the mortgage co. refused. Their policy is 18 months into loan and 20% of home value. I am at 24 months and alot more than 20%. Heck, when I walked out of closing I had $30,000. in equity.

    How can I get them to take the PI off my loan?
    reply
  • jackharrell

    9 months ago

    Try here: http://www.ftc.gov/bcp/conline/pubs/alerts/pmia... I thought I remembered it was illegal for the mortgage holder to continue PMI after the 20% equity was met.
    reply
  • Miss America

    9 months ago

    Interesting that you published this article..I've been wondering why there has been no mention of PMI, during this whole mortgage chaos..
    reply

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