Mortgage Insurers - Foreclosure "White Knights"?

Many homeowners who bought their house with less than 20% down carry private mortgage insurance (PMI). But, for the most part, they do not even know the name of their mortgage insurer. The insurance was just a necessary afterthought - something their lender required them to buy.

But these days, with many homeowners in default, and tales of indifferent lenders not returning phone calls for help, your mortgage insurer (you can find the name on your closing HUD-1 statement) can be your ally.

Mortgage insurers typically lose $50,000-$60,000 for each home that goes into foreclosure, so it's in their best interest to help you workout a solution (i.e. adjustment, short sale, etc).

Mortgage insurers have staffed up during the latest crisis and even have liaison people located in large lending companies. Many times, they can get through to your lender, and have the clout to push them to negotiate.

Unlike your lender, who may have bought your mortgage third-hand and is unfamiliar with your loan, your mortgage insurer is usually the same throughout your loan.

So, if you are behind in your loan payments, and your lender either won't talk to you, or refuses to negotiate, try calling your mortgage insurer for help.