Question about PMI insurance. I did a refi last year and now I am going through a divorce. Neither of us can afford payments on the home by ourselves and renting or getting roomates is out of the question. When we did the refi, we did the typical american thing of max out the equity and then blow it on a big vacation. Problem is the loan is for 275k and with the housing market the way it is, the home is currently only worth 250k and if we are lucky, we might get 260k out of it. When we did the refi, we got a loan with PMI built into the rate. From what I have heard, if we just let it go to foreclosure, the house will go to auction eventually and we will be responsible for the difference between the loan amount and the amount the home sold for. My question is, doesn't the PMI take care of this?
