Mortgage insurance is an agreement between the lender and borrower, in which if borrower fails to meet the demands or rules mentioned in the contract, he(borrower) is compelled to give compensation against this. Mortgage insurance is of both public and private type. Basically it has been designed for the safety of money lenders so that there money can be protected presided by regulations and rules.
Mortgage insurance is also known as Mortgage guarantee or home loan insurance. While in United Kingdom the policy is called as MORTGAGE INDEMNITY INSURANCE (MIG).
MORTGAGE TITLE INSURANCE: It is a type of indemnity insurance founded basically in United States of America. It provides insurance against financial loss because of the defect in title of the real property and invalidity of the mortgage loans. Within the United States of America, the large number of title insurance policies are written on land.
MORTGAGE LIFE PROTECTION INSURANCE: This form of insurance is designed for repayment of mortgage. In case the borrower is in the condition of dying while the mortgage life insurance is in force, then the policy will pay capital sum which will be sufficient to repay the mortgage amount.
MORTGAGE INSURANCE COMPANIES IN USA:Mortgage insurance started in US in the early of 1880s and the first law on it was passed in New York in 1904. The mortgage company raised in response to the 1920s real estate bubble and it was “completely bankrupted” by the Great Depression. And by 1933 no private mortgage insurance companies existed. But now there are varied mortgage insurance companies present in US.
TRIAD GUARANTY INSURANCE COMPANY
THE RADIAN GROUP
REPUBLIC MORTGAGE INSURANCE COMPANY
INVESTORS MORTGAGE INSURANCE COMPANY
MGIC MORTGAGE GUARANTY INSURANCE CORPORATION
UNITED GUARANTY INSURANCE COMPANY
CMG MORTGAGE INSURANCE COMPANY
PMI MORTGAGE INSURANCE COMPANY
GE CAPITAL MORTGAGE INSURANCE
Max H. Karl, real estate attorney, invented the modern form of private mortgage insurance and helped millions of people and families in getting the tag of home ownership by finding MORTGAGE GUARANTY INSURANCE CORPORATION. PRIVATE MORTGAGE INSURANCE: This insurance required with the most conventional mortgage program when the down payment of loan or equity position is 20% less than that of property value. The rate of Private mortgage insurance in United States of America lies in between from 0.14% to 2.24% of the principal sum per year based on the percent of loan insured. In US, PMI payments were tax-deductible by the borrower until 2018.
BORROWER PAID PRIVATE MORTGAGE INSURANCE: Abbreviated as BPMI, is the common type of PMI in today’s mortgage lending marketplace. It allows borrowers to obtain a mortgage without having to pay 20% of the down payment, by covering the lender for the added risk of a high loan-to-value mortgage. The US Homeowners Protection Act of 1998 allow the borrowers to apply for PMI cancellation when the mortgage amount is reached to a certain level.
LENDER PAID PRIVATE MORTGAGE INSURANCE: It is similar to BPMI and differs by the fact that it is paid by the lender and connects with the interest of rate of mortgage. It is a feature of loans that do not require mortgage insurance for having high LTV loans.