Hey Guys,
Im looking at purchasing a shortsale that currently has PMI… Is this deal worth persuing? What is the lenders incentive to deal if they get most of their money through PMI? Can someone please enlighten me? I dont really see a downside for the lender, either way they get their money, so they usually just let it go to foreclosure, right?
Karim
SS with PMI are usually a mess. The lender is basically the middle man. The PMI company makes the decision. They typically want a promisory note to close. I’ve done two deals with PMI - they took 8 months and the place was basically a tear down. I wouldn’t recommend doing them.
Well, in this case, its a pretty nice house… With about a 276K mortgage, but needs ~15-20K worth of work (to “spruce” up) in a great area… The bank told the realtor they need to net 220K; which leads me to believe that they have an 80% PMI coverage (so they get the top 20% anyway)…
Am i using fuzzy math there? This is my first time looking at PMI, so please someone correct me if im wrong!
Now, the thing is they want to “net” that amount 220K, which really doesnt make much sensse, since in essence i would be paying for the realtors, legal and all that other jazz with my offer for them to net that amount…
The lender has told the realor that they have “approved” 250K price point (which would net them 220K after legal and realor)…
BUT, the key here also is that the market is pretty frozen stiff here, so i would need some equity walking in or i could get left holding the bag… Is there a way to make this work?
Also, i have read that some folks go negotiate with the PMI company themselves… How do i find out who the PMI company is and how do you approach them directlly?
Anyone? With regard to the question above?..
Karim,
I have had a number of deals approved with PMI. You need to contact the PMI company directly. Ask the loss mitigator at the servicing company who the PMI company is then google them to find their contact.
I just had one today where the lender is Amtrust and they have been giving me the run around that the PMI company is dragging their feet. I asked the loss mitigator who the PMI co was and she indicated MGIC. I called MGIC, spoke with the person assigned to the file and she indicated they faxed the approval letter to Amtrust on 6/4!!! Needless to say, I just called the loss mitigator over at Amtrust and called her bluff.
Lazy loss mitigators are passing the buck so they can move the file to the bottom of the pile and go to lunch.
PMI deals are not as difficult to close as everyone on this forum says they are.
Thanks deaaak,
But, i guess what i am looking for is what is the strategy for deals involving PMI? How low do they usually go, i mean in a “deal” i am reviewing now the realtor is saying the bank wants to “net” 220K after realtor/legal/taxes etc… The house needs ~ 20K worth of light maintenance work to upgrade appearance and make it look high end…
But, the key here is i am in phoenix and it seems to be a declining market with little sales… The house as is “appraises” (banks appraisal) at 270K, no sales, the house is listed at 250K still no sales, i am thinking of offering 190K, but they have PMI… For the bank to net 220K the offer would have to be around 250K…
A house down the street sold for 290K, but still, this house needs some work and i have to figure in a profit, right?
So how would the deal work? I guess i dont understand what do you negotiate with the PMI company? It seems like the bank gets paid either way…