Homeowners to Be Rewarded for Making Mortgage Payments

July 11, 2011 No Comments »

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As if falling into foreclosure wasn’t incentive enough to keep up on mortgage payments, now mortgage insurer PMI Group has launched a pilot program that rewards those who simply pay their mortgage.

The company is working with Loan Value Group LLC to offer the “Responsible Homeowner Reward®, which put simply, provides homeowners with cash rewards for staying current on their mortgage.

How it works:

The homeowner receives an initial RH Reward amount (unclear what that amount is) and continues to make full and timely mortgage payments.

Additional money is added to the account for each month the homeowner maintains active status, meaning on-time payments.

Once the mortgage is paid in full, either when it’s sold, refinanced, or simply paid off, the homeowner is paid the entire RH Reward.

But if the homeowner becomes delinquent more than once in a 12-month period, they risk forfeiting the entire RH Reward.

There is no charge to borrowers to participate in the RH Reward program.

I’m not sure what other companies are working with LVG, but mortgage insurance companies clearly have to avoid mortgage payment default to ensure they aren’t on the hook for insuring high loan-to-value mortgages.

It is assumed that those eligible for the program are high-risk borrowers at risk of immediate strategic default.

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