Definition: "Mortgage Guaranty Insurance" is a type of insurance policy that provides coverage for the borrower's mortgage loan. The term "mortgage guaranty insurance" refers to a specific insurance policy designed to provide financial protection for borrowers who are unable or unwilling to repay their mortgage loans, often due to unforeseen circumstances such as economic downturns or job loss. The policy covers losses incurred by the borrower in connection with the origination and servicing of the loan. The policy typically provides financial protection against potential losses such as lost income, property damage, and other costs associated with non-payment. It also includes provisions for payment of any amounts due after the term of the policy has expired, which can be particularly important if borrowers are unable to meet their obligations on time or at all. In addition to providing protection against financial loss, mortgage guaranty insurance is often designed to provide an alternative source of income for borrowers. By offering a cashflow from the policy's premiums, borrowers may be able to maintain their financial independence and secure additional sources of income beyond just paying off their mortgage loan. Overall, mortgage guaranty insurance is a type of insurance product that helps protect borrowers who are unable or unwilling to pay back their mortgages, by providing financial protection against potential losses such as lost income and property damage.
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