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Title insurance is paid as a one-time lump sum by the buyer or mortgage lender at closing. Mortgage insurance would likely be paid the same way, as a lump sum up-front, rather than in monthly installments, as mortgage life insurance is paid.

Is Mortgage Insurance the Solution?
By [http://ezinearticles.com/?expert=Diane_Byers]Diane Byers

Private-sector or government mortgage insurance is suggested by Republicans in the U.S.A. as a rider to the $700 billion bank bail-out. It would work similarly to Canadians' title insurance, which guarantees the title to a property is valid because it has been thoroughly researched by an expert examiner.

Title insurance is paid as a one-time lump sum by the buyer or mortgage lender at closing. Mortgage insurance would likely be paid the same way, as a lump sum up-front, rather than in monthly installments, as mortgage life insurance is paid. It would increase the initial costs of buying a home. However, Republicans think mortgage insurance would limit the proposed tax burden on average Americans. Every man, woman, and child in the U.S. is "on the hook" for $2,300 if the bail-out takes place.

Speaker of the House of Representatives Nancy Pelosi said U.S. officials held an over-night session of talks and came to an agreement in principal about the bail-out. It just needs to be recorded on paper and ratified. Basically, the U.S. Treasury will buy bad debt and mortgage-backed securities from banks and other lending institutions that have large numbers of mortgages in default. The government will become the homeowners' landlord, which should reduce the number of evictions substantially. The government plans to offer lower monthly payments than the banks wanted, so homeowners can stay put on their properties. There are also provisions in the proposed law to help keep credit lines open. Presently, homeowners in many countries are experiencing difficulty renewing their expired mortgage terms because of tight financing, high interest, and lack of liquidity. As punishment for their poor lending practices, the proposed law caps the severance packages of bankers who led their companies into this mortgage debacle.

If the U.S. government is not compensated for the bail-out by 2013, then it expects the banks and other financiers to make good its losses. The U.S. government wants stock warrants as security for the bail-out, so that taxpayers can earn profits if the banks perform well in future.

Title insurance works well in Canada and the U.S.A. It increases homeowners' peace of mind, so most buyers are not reluctant to purchase it. No doubt mortgage insurance would increase the accountability of financiers on both sides of the border. Mortgage insurance is an excellent proposal for ensuring future stability, providing government examiners are a required part of the process.

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