How is it ok to charge PMI when a mortgager already has 20%...

[Eron A.]

How is it ok to charge PMI when a mortgager already has 20% equity in the house when they buy it? Where is the logic in this? In a foreclosure, is the lender not entitled to that 20% of equity?

Sounds like the lenders are in bed with the insurance companies. lool.

[Chris Seveney]

@Eron A.

Mortgages with less than 20% down are significantly higher at going in default.

If there was no PMI then the government would not insure the loan which would mean the banks would not lend the money without that insurance policy

Answer your question a bank can only collect what is owed. Any Equity goes to the borrower