Finance
A 'private mortgage insurance' (PMI) company typically pays claims to:
AA. The buyer if the property burns down
BB. The lender if the borrower defaults and the foreclosure sale proceeds are insufficient to cover the loan balance✓ Correct
CC. The borrower if they lose their job
DD. The title company at closing
Explanation
Private mortgage insurance (PMI) protects the lender (not the buyer) against losses if the borrower defaults and the property sells for less than the outstanding loan balance. PMI is required on conventional loans with less than 20% down to compensate the lender for the higher risk of a high LTV loan.
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