I was wondering what the real purpose of the Private Mortgage Insurance (PMI) is? From what I have read, homebuyers who put down less than 20% are required to take this on, then shouldn't it kick in when they are unable to make payments... and should it then not prevent foreclosure? Obviously, I am missing something because if this were the case then instead of a subprime mortgage crisis we would be in the midst of a run on the PMI companies
Any thoughts?

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