Homeowner Reward Co., a subsidiary of PMI, is set to start a pilot program in communities where a significant number of mortgages are underwater. The program will encourage those who continue to be current on their loans despite being higher than the home value, by offering incentives to remain current.
Some feel this program sends the wrong message in rewarding people for something they should do anyway. Others believe this program will help to encourage some who might otherwise fall behind to stay current.
At a time when PMI’s stock value has been plummeting the mortgage insurance program appears to be grasping at straws to salvage its business. More often than not, mortgage insurance is left holding the bag when a homeowner defaults on a loan with PMI insurance in place.