there are all sorts of financial instruments, this one does not sound esoteric
--- John Thornton <jthorn65 at sbcglobal.net> wrote:
>
> >So, about this housing bubble: Let's say I default
> on a mortgage and the
> >bank takes the property, and after they sell the
> property, they only get
> >half of what I owe them. What happens to the other
> half of the debt?
> >
> >All the best,
> >
> > John A
>
> I seem to remember some years ago a couple I knew
> that were financing a
> home had an insurance policy built into the loan.
> That is to say that part
> of their monthly payments, a very small part like
> $8.00 a month, was a
> premium on an insurance policy that would pay
> whatever the difference was
> between the remaining loan balance and the
> properties resale price in the
> case of foreclosure. They were required to carry
> this insurance because
> they were defined as a higher risk than average or
> some such bullshit. Is
> there such a thing or am I remembering this poorly?
>
> John Thornton
>
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