It’s probably better to get the info from HLS, but in case he doesn’t respond, here’s how I understand it…
If you don’t already have mortgage insurance (MI), then you should not have to pay it even if prices drop enough to put you entirely underwater on the mortgage. MI is agreed to up front. If you don’t have it already, you should not ever have to pay it for the life of the mortgage.
In theory, I suppose a lender to add some sort of clause to the original mortgage documents that would require MI if the owner’s equity fell below some percentage, but I’ve not heard of that being done before.
