Hi All , 

Situation

A house is in the pre-foreclosure process. The owner and the bank want
to sell the house. Owner owes more money on the house than the offered
price on the house and want to sell.

The bank is awaiting for a PMI ( private mortgage insurance company )
clearance to accept the offer.

For clarity sake let's consider the following numbers

1. Value of the house when the current owner bought  = 200K
2. Loan amount outstanding on the principal	     = 170K
3. Fees, defaults, fines , interests etc 
	computed by the lender			     = 15K
4. Total outstanding amount according to lender	     = 185K ( 170 + 15)
5. Offered price on the house by prospective buyer   = 170K	( there is
no real estate agents involved)

Question:

1. In the above scenario if the Bank and current owner  sells the
house to the buyer, In a general case what amount is normally claimed
from the PMI

2. If the PMI refuses a short sale, the house will go for foreclosure
and the bank buys the house and list it with a real estate agency.
They sell it for say 185K and pays the agent 15K as fees. Is the bank
eligible to claim anything from PMI? Mainly what I want to clarify  is
 how the loss to the bank is computed? Do they take 185K as the sold
price or 170K ( 185- 15K commission) and then take a difference
between Total money outstanding ( Principal + interests etc.)

Thanks for your attention and answers...