Finance
Which of the following BEST describes 'private mortgage insurance' (PMI) in a Florida transaction?
AInsurance protecting the borrower if they lose their job
BInsurance protecting the lender if the borrower defaults, typically required when LTV exceeds 80%✓ Correct
CTitle insurance required by private lenders
DHazard insurance required by HOAs
Explanation
PMI is insurance that protects the lender (not the borrower) in case of default. It is typically required when the down payment is less than 20% (LTV greater than 80%). Under federal law, PMI must be cancelled when the LTV reaches 78%.
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