Help me out...

[anziconda]

So, this is the deal. I bought my house 2 years ago. I was just like everyone else. No money down. Part of the deal when you do a loan like this is Mortgage insurance. This is tacking on approximately 200.00 per month onto my house payment. This is my question, WTF is this for?? I interput it to be an insurance for the lender in case I don't pay my mortgage, right?? Well why isn't it helping the current financial crisis? Most of the people who have problems with their house payments are the no money down people like me, so where was this insurance when everyone needed it???? So basically, I'm paying 200.00 a month for what???
Btw...I am not in trouble, I've been paying on time and am doing well. I just think 200 a month is a lot of money!(I could pay a good part of my familys health insurance with that). Someone please shed some light on what this insurance is all about, because it obviously didn't help anything in the current "economic crisis" and I don't want to pay for the useless ****!!!!

 

[milehighassassin]

You are paying the mortgage company's insurance for them.

Because of lack of money to put down, credit history, etc, you are considered a higher risk, so you have to have insurance. It doesn't cover you, it covers the bank.


It sucks but they did let you into a bank without any commitment (money down).

Your best bet would be to try and see if you can refinance without the insurance, possibly for a lower rate than you have now. BTW... I read (have not followed up on) that the feds are cutting lending rates by .50%

 

[anziconda]

You are paying the mortgage company's insurance for them.

Because of lack of money to put down, credit history, etc, you are considered a higher risk, so you have to have insurance. It doesn't cover you, it covers the bank.


It sucks but they did let you into a bank without any commitment (money down).

Your best bet would be to try and see if you can refinance without the insurance, possibly for a lower rate than you have now. BTW... I read (have not followed up on) that the feds are cutting lending rates by .50%

Yes, I get that...the insurance is for the banks, right...well how come all the banks are all broke right now...where was the mortgage insurance when they needed it??? Thats my point...why pay for something that obviously doesn't do a fckn thing!!!!

 

[mad1818]

I could be wrong but I thought the insurance was for if you lost your job or got hurt and couldn't work it would continue to make your payments for you for a certain amount of time. Gotta be a banker somewhere on here that could help explain this cause I wanna know now too.

 

[khaddon2110]

Yes, I get that...the insurance is for the banks, right...well how come all the banks are all broke right now...where was the mortgage insurance when they needed it??? Thats my point...why pay for something that obviously doesn't do a fckn thing!!!!

is it possible that the banks are self insuring the risk?.....that money they collect every month is pooled, and then used to cover the loans that turn up bad.... works fine when the percentage of failures is very low.

We self insure our shipments that we do with UPS, and it works out pretty good, but I'm sure we would be upside down if all of the sudden, UPS routinely lost or broke 5% of our shipments...

I don't have morgage insurance and havn't for years, so I'm not sure, but it is possible.....

 

[triple]

I guess the big question is "How many no-money-down home buyers have any sort of insurance?" and to a lesser degree " when does the insurance kick in and where is the money going until it kicks in?".

 

[Powderhound]

So, this is the deal. I bought my house 2 years ago. I was just like everyone else. No money down. Part of the deal when you do a loan like this is Mortgage insurance. This is tacking on approximately 200.00 per month onto my house payment. This is my question, WTF is this for?? I interput it to be an insurance for the lender in case I don't pay my mortgage, right?? Well why isn't it helping the current financial crisis? Most of the people who have problems with their house payments are the no money down people like me, so where was this insurance when everyone needed it???? So basically, I'm paying 200.00 a month for what???
Btw...I am not in trouble, I've been paying on time and am doing well. I just think 200 a month is a lot of money!(I could pay a good part of my familys health insurance with that). Someone please shed some light on what this insurance is all about, because it obviously didn't help anything in the current "economic crisis" and I don't want to pay for the useless ****!!!!

It is actually the Mortgage Insurance that is saving us from going under as a whole. They have been paying off so many of these loans that they themselves are in a world of Trouble. The mortgage world has changed so much in the last few months. You can no longer get zero down financing. You can no longer purchase a rental property with less than 20 percent down. You now have to have a 620 credit score and 5% down or the PMI companies wont insure them cause they are taking such a bath. Call me at 208-221-5257, Or shoot me a PM. I can go over your situation with you their may be a way to get rid of the PMI payment. I am a Mortgage Broker and I might be able to help

 

[Powderhound]

You are paying the mortgage company's insurance for them.

Because of lack of money to put down, credit history, etc, you are considered a higher risk, so you have to have insurance. It doesn't cover you, it covers the bank.


It sucks but they did let you into a bank without any commitment (money down).

Your best bet would be to try and see if you can refinance without the insurance, possibly for a lower rate than you have now. BTW... I read (have not followed up on) that the feds are cutting lending rates by .50%

The Feds did cut rates by a 1/2, and the Mortgage rates have shot up. Weds morning I was quoting 5.5% on a 30-year fixed. Right now today they are at 6.375%. The rate cut caused the long term mortgage rates to jump

 

[triple]

I would bet that the "insurance" dollars are not really insurance but a slightly nicer and more than hidden way of bonusing your mortgage rate due to the circumstances (no money down, slightly less that stellar credit, shortfall in the value of the asset etc.).

I have loan protector insurance on any personal loans that I have but it's nowhere near the cost of yours albeit not as much money being lent. THe insurance covers life and disability.

 

[Powderhound]

I could be wrong but I thought the insurance was for if you lost your job or got hurt and couldn't work it would continue to make your payments for you for a certain amount of time. Gotta be a banker somewhere on here that could help explain this cause I wanna know now too.

Incorrect it only covers the banks cause anything over 80% loan to value is considered higher risk.... Sorry to be the bearer of bad news

 

[trackvs2wheels]

Ding...ding...ding...we have a winner.

I think that the banks were self-insuring themselves when it comes to this worthless piece of $hit idea! However, when things started going bad in a hurry, alot of good that money that YOU pay each month did...there just wasn't enough of it to go around

Track~

is it possible that the banks are self insuring the risk?.....that money they collect every month is pooled, and then used to cover the loans that turn up bad.... works fine when the percentage of failures is very low.

We self insure our shipments that we do with UPS, and it works out pretty good, but I'm sure we would be upside down if all of the sudden, UPS routinely lost or broke 5% of our shipments...

I don't have morgage insurance and havn't for years, so I'm not sure, but it is possible.....

 

[trackvs2wheels]

OH, and don't worry...to think that you have been paying it for a couple of years now without anything in return......

YOU GET TO PAY FOR IT AGAIN BECAUSE WE BAILED THEM SONSA*****E$ OUT

Track~

 

[Work - Never]

All loans that have a loan over 80% of the property value are paying some type of mortgage insurance. It’s true some investors did self insure some of their portfolio. The mortgage insurance companies have been paying on these claims as agreed. This is one of the major problems in our system. They’re going broke. Some of the 700 billion dollar bailout is to help these companies stay solvent. It’s the mortgage insurance companies that are now clamping down on credit requirements and making it harder for people to get loans. Yes, they got greedy just like everyone else and lowered their underwriting standards. Mostly do to pressure being put on them from congress to get more people in homes. If these companies go under it will be impossible to buy a home with less then a 20% down payment until other options become available.

Something that is not getting discussed and I don’t know why. Did you know that FHA is currently doing a lot of the loans that would have been considered sub prime 2 years ago? That’s right, they are currently doing loans for people with credit scores as low as 550. All we have done is transfer a majority of the sub prime loans to FHA. This will come back to bite us in a few years when these loans go bad and the tax payers have to insure them. Freddie and Fannie and all the mortgage insurance companies have stopped doing the bad loans, the only organization that has not stopped is the Federal Housing Administration.

 

[Jeff C]

Find out at what level they will drop the mortgage insurance premium.

I would be very interested to hear what they have to say.


There are alot of people who put 20% down, only to have their houses devalue 25%.

Do they need to start paying mortgage insurance? Probably not

But the people who pay mortgage insurance, will they get to stop paying the premium after they payed off 20% of the balance of the original loan, or will it be after 20% of today's home value?

I bet there is some funny little writing in all that paperwork that covers their butts......

It would be interesting to find out........

 

[ouch]

I could be wrong but I thought the insurance was for if you lost your job or got hurt and couldn't work it would continue to make your payments for you for a certain amount of time. Gotta be a banker somewhere on here that could help explain this cause I wanna know now too.

agree...

 

[xrated]

what I was told by several bankers, both banks and credit unions when I bought, no money down but kick ace credit, was this.

After about 5 years time I would have paid enough on my mortgage to be able to drop the insurance, which yeah is like 200 of the total. So I have maybe 4 more years. Can't refinance after one year, I don't have the cash to pay closing fees again.

Course if I was told correct, when I can drop the extra 200 each month, I will be so used to paying it and living on what is left, I may as well keep paying 200 on principal and get this damn thing paid down.

 

[brushwolf]

Don't make a mistake and think that they will automatically let you drop mortgage insurance and let the additional 200 go to principle. In most cases you must make a request to drop the insurance and they must approve it before it happens.

 

[MN_Nole]

The reason for the mortgage insurance was for loans like yours, but unlike you most have now defaulted. Hence the reason AIG went under as they were one of the biggest backers of the mortgage insurance market.( maybe part of the reason, but a big factor)

You can get rid of the mortgage insurance, once you have 20% into the house value based upon the mortgage amount, but in todays market, highly unlikely.
It can depend on your area as well,if you did not have as much real estate speculation in your area, the housing market may not have hit you as hard. Do an online search of house sales in our area and look for comp. houses, to gage your house values vs the market going price. If houses are actually selling above you original price, possibly 20%, then look to refinance out to the PMI( mortgage insurance)