1.   It protects lenders and large mortgage investors if the borrower defaults on the mortgage.

2.   The city is not liable for payment on the bonds even if the borrower defaults, Gittings said.

3.   If the borrower defaults, the bank can take the house.

4.   Because of low down payments, some affordable homeownership programs require mortgage insurance, which pays lender claims if a borrower defaults on a loan.

5.   Both documents become operative only if the borrower defaults on the loan and the bank forecloses under the security agreement.

6.   All are cut off if one borrower defaults.

7.   But, under PMI, it is the lender who is paid if the borrower defaults and the house goes into foreclosure.

8.   If a borrower defaults, the government pays the lender for losses incurred.

9.   If the borrowers default, Ginnie Mae will buy back the bonds it secures for their face value.

10.   In other words, if a borrower defaults on the mortgage payment, the borrower still loses the home.