Replacing Insurance

[feellost]

My modification has been approved and all documents signed and returned to BofA. My question now is what to do about homeowners insurance. I had stopped paying it a few months ago, and BofA obtained lender's placed insurance that cost almost $4,000 per year. I was just approved for a policy that costs $1,300 per year. I want to replace BofA's policy. Has anyone done that after a successful modification? Will it have any bearing on my modification? Will they let me pay my own homeowners insurance and my own taxes again now that the modification is done? Thanks.

[Evan Bedard]

Hi feelost,

My modification has been approved and all documents signed and returned to BofA. My question now is what to do about homeowners insurance. I had stopped paying it a few months ago, and BofA obtained lender's placed insurance that cost almost $4,000 per year. I was just approved for a policy that costs $1,300 per year. I want to replace BofA's policy. Has anyone done that after a successful modification? Will it have any bearing on my modification? Will they let me pay my own homeowners insurance and my own taxes again now that the modification is done? Thanks.

Your lender typically includes homeowners insurance and taxes as part of the agreement to make sure they cover all the bases. I'm not sure that they will accept that because it will change the terms of the agreement completely. I would call in and ask if you can do this without affecting the mod..

[feellost]

Actually, the modification agreement itself does not include the homeowners insurance and property taxes. It only states how much I have to pay monthly for principal and interest. However, the cover sheet that discusses the modification has a breakdown that includes the monthly payment for taxes and insurance. I haven't paid for the new policy yet, so maybe I'll call them once the bank has signed the modification agreement and inquire about that. Thanks, Evan.

[pyeatpr]

Originally Posted by feellost

My modification has been approved and all documents signed and returned to BofA. My question now is what to do about homeowners insurance. I had stopped paying it a few months ago, and BofA obtained lender's placed insurance that cost almost $4,000 per year. I was just approved for a policy that costs $1,300 per year. I want to replace BofA's policy. Has anyone done that after a successful modification? Will it have any bearing on my modification? Will they let me pay my own homeowners insurance and my own taxes again now that the modification is done? Thanks.

I concur it would be best be to complete the modification first, then request to change homeowers insurance online or call them to do so. Once the new policy is in place, you can request a new escrow analysis, which I was told can be done at anytime. At that time they would remove the current policy and replace it with your new one and recalculate your new payment. After my modification I made them do it three times because they kept making mistakes (That is another story all together)

[feellost]

Thanks pyeatpr. Sounds like changing insurers could be a whole other ordeal :-) Did you ever try telling them you would pay insurance yourself? Someone told me that once you go through a modification, they won't allow you to pay insurance and taxes on your own anymore. Any truth to that?

[pyeatpr]

Originally Posted by feellost

Thanks pyeatpr. Sounds like changing insurers could be a whole other ordeal :-) Did you ever try telling them you would pay insurance yourself? Someone told me that once you go through a modification, they won't allow you to pay insurance and taxes on your own anymore. Any truth to that?

I always had mine escrowed and just decided to keep it that way. I never asked to pay it on my own.

My home is worth $70,000 less than the city has valued for taxes. Next year I am going to city hall and fight that vaulation based on other homes that sold in my neighborhood. I bet that will be a bigger ordeal than my escrow with BOA.