My Mate just called me a second ago sounding very stressed. He...

My Mate just called me a second ago sounding very stressed. He said the Commonwealth bank wants him to pay $50,000 in lenders mortgage insurance for his fourth investment property that he is in the process of buying (and has already paid a deposit and stamp duty on).

I told him that does not make sense given the property is only worth $365,000!

He then told me that Commonwealth Bank had revalued his other properties and that his only Melbourne property had been revalued from $420,000 down to just $320,000.

Then I remember someone on Hotcopper saying that Commonwealth Bank home loans are like a margin loan in that if the equity drops below 80% then you need to top up the equity (and pay lenders mortgage insurance?). He has always had a 20% deposit so he has never had to pay lenders mortgage insurance.

Do you think this is what is happening to my mate? Is the Commonwealth Bank putting the call on him? Can someone provide a link to where this is explained on the net. Your help is welcome.

For now I told him to talk to another bank to see if they can take all his properties off him (but there might be problems given one of the properties is under 50m2!). Does anyone know which banks might be willing to take him on?