Finance
What is the purpose of private mortgage insurance (PMI) in Iowa residential lending?
ATo protect the buyer from title defects
BTo protect the lender if the borrower defaults✓ Correct
CTo insure the property against physical damage
DTo guarantee the seller receives full proceeds
Explanation
PMI protects the lender—not the borrower—if the borrower defaults on a conventional loan with less than 20% down payment. The borrower pays the premium.
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