Question
Sam bought a house that costs $1,000,000. Sam got a 97% 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 97% 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 $750,000 in a foreclosure auction. How much will the mortgage insurance company pay Sam s lender?
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Fundamentals Of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
16th Edition
0357517571, 978-0357517574
