Question
Sam bought a house that costs $1,000,000. Sam got a 105% LTV loan. The lender demanded that Sam buy private mortgage insurance to insure the
Sam bought a house that costs $1,000,000. Sam got a 105% LTV loan. The lender demanded that Sam buy private mortgage insurance to insure the portion of the loan over 80% LTV. Suppose 5 years later, Sam's mortgage balance is $900,000. However, Sam defaults and his house sells for $600,000 in a foreclosure auction. How much will the mortgage insurance company pay Sam's lender?
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International financial management
Authors: Jeff Madura
12th edition
1133947832, 978-1305195011, 978-1133947837
