Legal Question in Real Estate Law in Illinois

Does PMI pay the balabce of your loan after foreclosure?

We lost our house in March of 2007 to foreclosure. We had PMI included in our house loan. The house sold at the Sheriffs sale for about $20,000.00 less than what we owed on the loan. Did the PMI pay the $20,000.00? We have not heard anything about the foreclosure in over a year. Thank you.


Asked on 5/08/08, 9:34 pm

2 Answers from Attorneys
Nicholas Chrisos Nicholas G. Chrisos Attorney at Law

Re: Does PMI pay the balabce of your loan after foreclosure?

I not sure, but I believe PMI would cover the deficiency in that situation. However, I don't know if that means you're off the hook completely. For example, the deficiency is considered income if it's not your residence. On the other hand, I don't believe the PMI insurance company can try to recover the amount from you.

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Answered on 5/09/08, 1:09 pm
Thomas Moens Moens Law Offices, Chartered

Re: Does PMI pay the balabce of your loan after foreclosure?

The PMI company would insure the lender only. You still may be liable for any deficiency, and the PMI company would be able to look to you for the difference. It is somewhat unusual for them to do this, however, this will (obviously) show up on your credit report.

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Answered on 5/09/08, 4:03 pm


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