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Insurance on Short Sales

Posted by Kenneth Skidmore on January 13, 2011 at 2:58am in Short Sale Discussions

I have asked several people but cant get a definitive answer. Maybe someone here can help?

 

If your client goes delinquent on their mortgage and insurance, is the lender covered if something were to happen to the property, I guess I mean does the lender continue to pay for a policy?  

What if the case is a bankrupcy and the collotalized property has been moved over to a trustee?  Has anyone had any experience with this or would you be able to point me in the right direction?

 

Thanks in advance.

 

 

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Replies

  • Jim Schneider January 13, 2011 at 4:43am

    The mortgage usually has an option where the mortgagee can force place insurance, which means very expensive home owners' insurance that the owner has no ability to refuse or choose. The cost of this is added to the mortgagor's debt. I don't think bankrupcy or collaterization would change this.

    Here's a short explanation:

    e-HOW definition of Force Placed Insurance

    Hope this Helps

    Jim Schneider, Broker

    Clear Point Realty

    serving Chicago and nearby suburbs

    630 981-7300

     

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