eCompare

Assumption Defaults

This calculator assumes the following:

• Loan Characteristics:
  - Purchase only
  - Owner-occupied, primary residence
  - Single-family attached or detached
• Documentation Type:
  - Full Documentation – No Limited Documentation

The MI rate is determined by combining several factors including: LTV, MI coverage, FICO, Loan type and Loan term.

The Value of MI is based on an analysis of claims paid from 2004 to 2005 and reflects PMI’s portfolio-wide claim experience.

The analysis is an average of PMI’s claim experience and does not reflect state specific requirements and variations which may cause the lender’s loss to be greater or less than the average.

 
FORECLOSED PROPERTY VALUE
Value at Foreclosure: Estimated value of distressed property at time of foreclosure.

Holding cost: The investment opportunity lost when choosing to purchase the property in default.  For example, a lender may earn a 5% return on their investment portfolio.  Therefore, when a lender purchases a property, the monies tied up for the purchase of the property can not earn the 5% return on investment.

Disposition Costs: Costs associated with the sale of the property; e.g. broker commissions and seller paid concessions.

 
Why MI?
Total Loss: Sum of the following: First Mortgage Unpaid Principal Balance; First Mortgage Interest & Fees; Unearned Premium; Second Mortgage Unpaid Balance; and Second Mortgage Interest & Fees.
 
First Mortgage Interest & Fees: Mortgage insurance policies issued by PMI permit certain additional expenses beyond the loan’s unpaid principal balance and lost interest when calculating the lender’s Total Loss.  The additional expenses may include attorney fees, foreclosure and court costs, property preservation (i.e. changing locks, etc.), HOA fees, property taxes, hazard insurance, and appraisal fees.  The claim amount is then reduced by any escrow or receivership accounts.
 
Initial Lender Exposure: Total Loss minus Net Proceeds from Sale
 
MI Coverage Level: Mortgage insurance coverage level required by the lender at the time of loan closing.
 
MI Max Claim Payment:  Total Loss multiplied by MI Coverage Level