Consider a borrower who purchased a $300,000 home using conventional confor nancing at 90% LTV. The underwriting approval requires private mortgage insura PMI) with 30% coverage. Suppose over time the borrower pays down the princip the loan to a balance of $259,377, but is no longer able to make any additional Dayments and defaults. If the servicer were to foreclose on the collateral property sell it clearing $159,749 in net proceeds, how much is the loss of principal taking consideration the protection provided by the mortgage insurance policy? Input your answer rounded to the nearest whole dollar and without the $ or neg
Consider a borrower who purchased a $300,000 home using conventional confor nancing at 90% LTV. The underwriting approval requires private mortgage insura PMI) with 30% coverage. Suppose over time the borrower pays down the princip the loan to a balance of $259,377, but is no longer able to make any additional Dayments and defaults. If the servicer were to foreclose on the collateral property sell it clearing $159,749 in net proceeds, how much is the loss of principal taking consideration the protection provided by the mortgage insurance policy? Input your answer rounded to the nearest whole dollar and without the $ or neg
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Consider a borrower who purchased a $300,000 home using conventional conforming
financing at 90% LTV. The underwriting approval requires private mortgage insurance
(PMI) with 30% coverage. Suppose over time the borrower pays down the principal of
the loan to a balance of $259,377, but is no longer able to make any additional
payments and defaults. If the servicer were to foreclose on the collateral property and
sell it clearing $159,749 in net proceeds, how much is the loss of principal taking into
consideration the protection provided by the mortgage insurance policy?
(Input your answer rounded to the nearest whole dollar and without the $ or negative
signs, e.g., input a loss of -$100,000 as 100,000)
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