Mobley v. Commonwealth Mortgage Assurance Co.

Sears, Justice.

In order to purchase real property, the appellants borrowed $59,000. As required by their lender, the appellants obtained private mortgage insurance from the appellee, Commonwealth Mortgage Assurance Company (Commonwealth). The insurance policy provided that in the event of default, Commonwealth would pay the lender 30 percent of the appellants’ outstanding debt at the time of default, irrespective of any amount bid at a foreclosure sale. As a condition of issuing the insurance policy, Commonwealth required that the appellants execute an indemnity agreement, indemnifying…