Quote:
Originally Posted by smurf
No. You are completely unaware of almost everything financial.
Private Mortgage Insurance (PMI)
Yes, but when the property is sold, and the bank is still not whole, then the bank is protected by private mortgage insurance.
I am not well versed in credit default swaps, but considering the fact that you don't even know what private mortgage insurance is, I am highly reluctant to believe that which you have posted unless you have some sort of factual support backing up that claim. |
Oddly, I too never heard of PMI, and assumed Dis was talking about traditional Credit Life, which is exactly what Goober described. The PMI thing is newer than when I paid off the loan to my house, and I also suspect anyone who didn't need a sub-prime loan or could afford a traditional 20% down loan would not have a need to hear of PMI.
PMI, as I understand it, merely protects the bank/mortgage holder and any loan default still results in foreclosure. The things are sold to people who either couldn't afford the 20% down or were actively "flipping" houses, and end when there's an 80/20 loan/equity relationship. The things must have been extremely profitable to the underwriter, until the real estate crash.
Be that as it may, it doesn't detract from Goober's accurate description of CDS's.
2 Weeks Ago
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