The Stop Foreclosure Institute recently received a question from Max. Here is Max's Question.



"If I pay mortgage insurance and default on my loan, why wouldn’t that cover the deficiency amount? Max."



Discover how other sellers successfully did a short sale to avoid f...



Here is the answer to Max's Question: Yes, the Mortgage Insurance should pay your lender for any loss. So that reduces the amount that your lender will lose on the short sale.



There are a couple of problems. Many Mortgage Insurance Companies have gone bankrupt. They can't pay on their claims.



In this situation your lender may or may not pursue you for the loss.



(I've written extensively on deficiencies on other blog posts. In 60-75% of all short sales, you won't owe a deficiency. E-mail me at [email protected] and I can research your specific situation.)



The other problem is that many Mortgage Insurance Companies have terms written into the mortgage that they can pursue you for the loss.



They are more aggressive with trying to be repaid. In the few short sales we have negotiated and the lender asked for a promissory note, the person requesting it usually was the Mortgage Insurance Company.



But, they only ask for a promissory note about half the time. In addition, the promissory notes are usually for an amount lower than the loss.



For example on one short sale, the loss was around $59,000. The seller agreed to a promissory note of $10,000 to be repaid over the next 10 years with Zero Interest. Their Monthly Payment was $83.33.



We won't know if they will ask for a promissory note until the short sale is in progress. If you know you have Mortgage Insurance, then you need to find and aggressive short sale agent.



They will work to get an promissory note or deficiency waived. Thinking about a short sale?



I can help you short sale your property and never pay the bank another penny. Send me an e-mail at [email protected]. I will contact you for a free consultation.



When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 770-875-4268



Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.



Thinking about a loan modification? Our Powder Springs loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.



Thanks for reading this, Bion Grady.



Bion is a Real Estate Agent at Maximum One Realty Greater Atlanta. Powder Springs Short Sales Realtor:



Phone: 770-875-4268. [email protected].



A Better Solution



View My homes for sale at www.bionsellshomes.com.



Bion Grady specializes in loan modification assistance and short sales in Powder Springs Georgia. Powder Springs Loan Modification Help, Powder Springs Short Sales. Powder Springs Short Sale Realtor , Short Sale Realtor. Powder Springs GA Short Sales. Powder Springs Realtor.



Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Bion Grady's personal views and do not reflect the views of Maximum One Realty Greater Atlanta.



This information on Powder Springs Short Sales: I Have Mortgage Insurance. Won't That Cover The Deficiency? is provided as a courtesy to our viewers to help them make informed decisions.