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| CRE Online > Real Estate Law > Bill Bronchick > Question and Answer |
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Question by Bryan J. Smith:
I am having one hell of a terrible time making my first creative real estate deal. It seems that every time I make a little headway another problem crops up. The latest has to do with a refinance I did on our primary residence. We obtained a conventional uninsured loan for $70,500 at 6.75% on our house, which was appraised at $90,000. The loan to value ratio is only 78%. The original lender required no Private Mortgage Insurance. The paper was sold to another and now the new holder of the mortgage wants us to pay for Private Mortgage Insurance(PMI). We only borrowed the 78% so that we could avoid the need to pay for PMI. They keep sending us nasty letters asking why we sent the amount we did, which was $457.27. They claim that they can't do a thing with our payments until we send along the premium for Private Mortgage Insurance. What recourse do we have? Help! Thanks! Answer By William Bronchick: You need to read your loan papers, particularly your promissory note to determine whether you are required to carry mortgage insurance. They cannot unilaterally demand it. Disclaimer: The foregoing is not intended to be given as legal, financial or tax advice, but intended for instructional use only. If you require legal, financial or tax advice you should seek the assistance of a qualified professional.
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