Finance
What is the primary purpose of Private Mortgage Insurance (PMI) in Michigan conventional loans?
ATo insure the borrower's life in case of death
BTo protect the lender against borrower default when down payment is less than 20%✓ Correct
CTo cover property damage caused by natural disasters
DTo guarantee the appraised value of the property
Explanation
PMI protects the lender (not the borrower) in the event the borrower defaults. It is required on conventional loans when the down payment is less than 20% of the purchase price.
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