Legal Question in Real Estate Law in Utah

mortgage pmi

I pay for private mortgage insurance (pmi) when I make my mortgage payment. If I do a deed in lieu of foreclosure, will this insurance cover any deficiency when the house is sold, or will I be in danger of incurring a deficiency judgment? I know the deed will ruin my credit, but I am exploring all options at this point and am mainly concerned about future debt. There are 2 of us on the mortgage and both would execute the deed.


Asked on 10/12/08, 10:19 am

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: mortgage pmi

PMI does not protect you from your failure to pay the mortgage. PMI protects the bank who took a risk to lend to you with a small down payment. Note: the lender does not need to accept your deed in lieu. They can sue you for the difference between the amount you owe (plus legal fees and costs) and the amount the house sells for at foreclosure.

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Answered on 10/13/08, 10:58 am


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