With this type of insurance, your home loan is automatically paid off in the unfortunate event of foreclosure. (badcreditloanservices.com)
«Recourse» is the ability of the lender to recover money owed by the borrower in the event of foreclosure. (themortgagereports.com)
For borrowers who don't put 20 % down — which is not a requirement — and are viewed by lenders as higher credit risk, mortgage insurers reduce or eliminate losses by providing protection to the lender in the event of a foreclosure. (usmi.org)