Suppose you have just purchased your first home for $425,000. At the time of purchase you put 10% to the purchase price as a down-payment and financed the balance. You had to purchase PMI that covered up to 35% of the lenders top loss. Over time you paid down the principal of the loan to $360,500 and at that point in time you can no longer make any mortgage payments (i.e., you default on the loan). If the lender were to foreclose on your property and sell it for $211,875, determine the amount of the loans principal that the lender was unable to recover due to the default. $250,000 $110,250 $14,750 $350,000