Who Collects On The Insurance If You Default?

I assume you are speaking of the MIPI that is required on mortgages that are underfunded or essentially established with less than a 20% down payment when the loan is established. The party providing or guaranteeing the loan is the one that will receive the money. Since the federal government is usually the guarantor of the mortgage and most mortgages are guaranteed by the federal loan program known as FANNIE MAE. The mortgage insurance is to protect the lender and gaurentor, the federal government, in case of default. In most instances the federal government backs most mortgage loans. This MIPI is a federal requirement to ensure that a underfunded loan is protected  since FANNIE MAE usually backs these type of loans as a lender would not usually lend the money without this backing. The insurance usually does not pay the full amount of the mortgage since the property has value. The insurance will make up the shortage if any between what was loaned and what the property is sold for at auction.

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