2015-01-23necir.org

``Private mortgage insurance was created to help less wealthy people buy homes by reducing the risk to mortgage lenders if the borrower defaults. Generally, home buyers who make less than a 20 percent downpayment must buy the insurance, which typically costs $30 to $70 for every $100,000 borrowed, and pays the bank for some of its losses when the borrower doesn't pay the mortgage and the house goes into foreclosure.

But while the policies have helped hundreds of thousands obtain a mortgage nationwide, they also created a class of home owners who were especially vulnerable when the economy crashed in 2008. They had large mortgages -- sometimes pressed upon them by predatory lenders -- and little equity in their houses. When real estate values collapsed, they often owed more than their houses were worth.''



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