Can we get homeowners insurance on a property we own 75% of the outstanding loan?
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UPDATED: Sep 15, 2011
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Insurance Question from Harleysville, PA
Asked on 09/15/2011
Can we get homeowners insurance on a property we own 75% of the outstanding loan? We sold the property next door 4 years ago to a couple in an owner finance situation. Currently this couple is behind on their taxes, are not complying with township building and zoning regulations and we have not received their mortgage payment for this month. We have hired an attorneyto help us with how to handle this situation. Because relations between us and the couple are very VERY strained we feel they may be in the process of leaving/foreclosing on their mortgage note. Could we or rather should we buy homeowners insurance so as to protect our investment?
Answer given on September 18, 2011
The purchaser of your property should have been required to carry insurance on the home and you should be receiving evidence of insurance. In addition, if you are listed, you would receive any notice of non payment of the insurance or cancellation. You need to make sure the insurance is still in force on the home. If you are not listed on the policy, get added immediately.If there is a policy in force, you need to make sure the premium continues to be paid. If it is not, I would recommend that you pay the premium to keep the insurance in force. If the people move out, I would recommend that you contact your insurance agent to see if you can purchase insurance on the home.Your attorney should also be able to assist you in this area to be sure you are properly protected in the event the borrowers should default or move out.
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