Replies to This Discussion

Permalink Reply by Debra Enos on January 13, 2011 at 12:15pm

He needs to see what he can do to reinstate it with the current policy ASAP, or go to any insurance to start a new policy, ASAP.  Term doesn't matter,  most are for a year but  will be canceled upon close of escrow.  In the mean while your seller is liable if it burns down!  The banks who approve a short sale, or have where the seller has to sign an agreement (like B of A cooperative)  agrees to specific terms, include keeping the insurance current.   The insurance is required to notify the bank that the policy has been canceled.  Same goes for a car that is leased or on payments.  So the bank will find out very, very soon.  They might attach a very expensive policy - maybe/but probably not since they will be paying for it......but since he is 5 months in default, they could very well foreclose on him. Get the insurance reinstated.  He can always up the deducible, and lower liability limts to save on the premium.

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Permalink Reply by Laura Marshall on January 13, 2011 at 1:06pm

Hi. I used to work in the foreclosure department of a major bank and asset management as well. If the homeowner can not afford the policy, have him call the bank and let them know that the property is uninsured. Have him speak with the insurance department (customer service can transfer him there) and request that a force order policy be placed on the property ASAP. It is quite expensive, but the bank will pay for it. If the homeowner was going to keep the property, the cost would be added to the monthly payments. Otherwise, it will just be part of the loss in the short sale. The policy is only a fire policy, so the homeowner will want to obtain a renters policy to cover personal items. Most likely, the insurance company has already notified the lender, and they have already done this....but it is best if he calls to make sure.

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Permalink Reply by Kimberley Kelly on January 14, 2011 at 5:08am

Great information Laura..thank you!

Laura Marshall said:

Hi. I used to work in the foreclosure department of a major bank and asset management as well. If the homeowner can not afford the policy, have him call the bank and let them know that the property is uninsured. Have him speak with the insurance department (customer service can transfer him there) and request that a force order policy be placed on the property ASAP. It is quite expensive, but the bank will pay for it. If the homeowner was going to keep the property, the cost would be added to the monthly payments. Otherwise, it will just be part of the loss in the short sale. The policy is only a fire policy, so the homeowner will want to obtain a renters policy to cover personal items. Most likely, the insurance company has already notified the lender, and they have already done this....but it is best if he calls to make sure.

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Permalink Reply by Lisa Capes on January 14, 2011 at 9:02am

Laura,  Thank you so much for responding so quickly!  I really appreciate it. 

Kimberley Kelly said:

Great information Laura..thank you!

Laura Marshall said:

Hi. I used to work in the foreclosure department of a major bank and asset management as well. If the homeowner can not afford the policy, have him call the bank and let them know that the property is uninsured. Have him speak with the insurance department (customer service can transfer him there) and request that a force order policy be placed on the property ASAP. It is quite expensive, but the bank will pay for it. If the homeowner was going to keep the property, the cost would be added to the monthly payments. Otherwise, it will just be part of the loss in the short sale. The policy is only a fire policy, so the homeowner will want to obtain a renters policy to cover personal items. Most likely, the insurance company has already notified the lender, and they have already done this....but it is best if he calls to make sure.

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Permalink Reply by Lisa Capes on January 14, 2011 at 9:03am

Hi Debra,

 

Thank you for replying.  This is a good suggestion.

Debra Enos said:

He needs to see what he can do to reinstate it with the current policy ASAP, or go to any insurance to start a new policy, ASAP.  Term doesn't matter,  most are for a year but  will be canceled upon close of escrow.  In the mean while your seller is liable if it burns down!  The banks who approve a short sale, or have where the seller has to sign an agreement (like B of A cooperative)  agrees to specific terms, include keeping the insurance current.   The insurance is required to notify the bank that the policy has been canceled.  Same goes for a car that is leased or on payments.  So the bank will find out very, very soon.  They might attach a very expensive policy - maybe/but probably not since they will be paying for it......but since he is 5 months in default, they could very well foreclose on him. Get the insurance reinstated.  He can always up the deducible, and lower liability limts to save on the premium.

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