Ronny Nowzari: Depends on what they mean by mortgage default insurance.Typically, PMI, is required for a loan to be marketable - if the buyer has less than 20% equity in the house, they are required to buy it. It pays the LENDER, and only the lender, AFTER the house is foreclosed on, the difference between what the house brings at auction, and the mortgage balance.It keeps the lender from being "upside down" on the loan, if the buyer stops paying....Show more
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