John bought a house that costs $$600,000$ with a $96\%$ LTV Ioan from the Mes Bank.

Mes Bank requires John to buy private mortgage insurance to insure the portion of the loan over $75\%$ LTV$.$

Five years later, John defaults and his house is sold for $$250,000$ in a foreclosure auction. The remaining balance of his mortgage is $$400,000.$

The private mortgage insurance company pays the Mes Bank $$.$