Hyde [46];How does any of that affect the ddaebeat or entitle them to stay in the house they haven't paid for?First of all, mortgage insurance does not pay off the entire note, it covers a defecit to the lender/noteholder it expressly presumes that the house will be sold and the insurnace policy is there to top up' the foreclosure sale recovery. If there is more than one policy on any given note, the insurers will likely battle it out over whose policy is primary or secondary, i.e., who has to pay first with the secondary policy kicking in only once the primary is exhausted. Also, the MI policy liability is typically not for the entire note. They were written to cover up to 20% of the loan value, less buyer downpayment. So I seriously doubt any entity is getting paid 5 times par in case of default.Even if there are two policies written to pay on the same default and this leads to a recovery in excess of losses, what's the BF (hairy) D? The bank could see so clearly that the home-debtor was a ddaebeat that they thought it profitable to pay for side action that paid off in the event of default. Turns out the bank was right, Howmuchamonth Harry and Hilda Homedebtor are ddaebeats. Usual caveats about counterparty risk to the bank and all that. Harry and Hilda Houwmuchamonth should still be out on their arse.