. Suppose a borrower has paid down their mortgage from $300,000 to $280,000 when they default. The home is sold at foreclosure for $200,000. If the borrower has PMI, insuring the top 30% of the loan, the lender's loss will be __________. If the borrower had an FHA loan, the lender's loss will be _____________.
A $0; $0
B $10,000, $0
C $16,000; $0
D $10,000; $80,000
Answer :- Option B). $ 10,000, $0.
Explanation :- Lender loss (if borrower having PMI insuring system) = (300000 * 30 %) - (280000 - 20000)
= 90000 - 80000
= $ 10000
Lender loss (if borrower having FHA loan system) = $ 0.
. Suppose a borrower has paid down their mortgage from $300,000 to $280,000 when they default. The home is sold at foreclosure for $200,000. If the borrower has PMI, insuring the top 30% of the loan,...
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