Question
Sam bought a house that costs $500,000. Sam got a 96% LTV loan. The lender demanded that Sam buy private mortgage insurance to insure the
Sam bought a house that costs $500,000. Sam got a 96% LTV loan. The lender demanded that Sam buy private mortgage insurance to insure the portion of the loan over 75% LTV. Suppose 5 years later, Sams mortgage balance is $400,000. However Sam defaults and his house sells for $150,000 in a foreclosure auction. How much will the mortgage insurance company pay Sams lender?
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International Financial Management
Authors: Jeff Madura
7th Edition
0324071744, 978-0324071740
