MI Approval and Release of Deficiency Balance
When you receive an approval letter on a short sale that includes a deficiency release, can the MI company come back to the borrower for a contribution or not release them from the deficiency?
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Permalink Reply by Ellen Muzzio on
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If the MI company does ask for a contribution OR doesn't release them from deficiency, it should clearly state that in the "approval letter" and then the seller can either continue with the short sale or bow out if it's not in their best interest (of course, after taking the approval letter to an attorney for review).
You can sometimes figure out on a 1st mortgage up front if there is going to be an MI company involved by looking at the note or getting a copy of their statement. However, we've had a few situations where the 2nd lender added MI without anyone's knowledge (they were paying for it) and these were the most difficult to deal with.
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