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home insurance during foreclosure process ?

Discussion in 'Wells Fargo Home Mortgage' started by thisishard, Mar 12, 2012.

  1. thisishard

    thisishard LoanSafe Member

    Hi Everybody,

    I tried searching the forum to find info on home insurance during foreclosure without any luck.

    I stopped paying my mortgage in November of 2011 in California. I pay my insurance yearly (around June) myself, so I have been covering the insurance end so far. Should I continue/cancel or what do folks here suggest???

    Thank you,
  2. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    If you are walking away from your property and do not pay your insurance your lender is going to step in and pay this for you (as they have to protect their interests in the home) and may set up escrow to your account to include ins..
  3. thisishard

    thisishard LoanSafe Member

    Thank you very much,

  4. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Also if you have HOA dues I would make sure you keep them current because they are very strict when it comes to pursuing homeowners for these dues and may file a suit against you..
  5. susandee

    susandee LoanSafe Member

    You do want to maintain liability insurance on the home owner's as you are responsible for any injuries on your property until it is sold. You could be sued if someone is injured. This was a recommendation to me by our attorney. We are in CA and in the same situation as you. We stopped paying in January. Also, if you walk, you want to make sure you have someone maintain the weeds, etc. as the weed abatement laws are pretty strict where I live in CA and you can still be fined. Also, broken windows, etc. are issues if the house is abandoned. As far as structure, if you don't care about the house, you can stop paying that as Evan stated.
  6. thisishard

    thisishard LoanSafe Member

    Thanks for all the info. Luckily, I do not have HOA fees to add to the grief as Evan mentioned above, but we live on acreage that we will address when the time comes...weed whack one last time here I guess.....

    I did get a letter from Wells the other day, saying some attorney group (in San Diego) will be handling the foreclosure and accelerating the deal. So the foreclosure is moving along.

    I am so grateful to this forum and to those who take the time and share their experiences and knowledge. It is incredibly helpful, and makes this whole mess seem a little less stressful. My sincere thanks!!!!!
  7. mrange25

    mrange25 LoanSafe Member

    I went through it so I can tell you what happened to me. After several months of missed payments I moved out of the home of my own volition. My lender sent me a letter stating. "We are cancelling your homeowner's insurance because your house is vacant. We are placing a forced insurance policy on the home."Basically that was the end of the story. They paid for it all. So if the home burns down the mortgage company will get a big fat check from the insurance co.I never did the liability insurance.
  8. susandee

    susandee LoanSafe Member

    mrange25 and you are lucky no one got injured. Anyone who abandons their home during the process should protect themselves in case of lawsuit for injury.
  9. mrange25

    mrange25 LoanSafe Member

    You are right. I did get lucky. I lived in a somewhat rural area. And my house was the only home on a dead end cul de sac with about 2 acres of woods surrounding my house. So there is rarely any foot traffic. If I lived in town along sidewalk with lots of traffic I probably would have gotten it.
  10. BustedBrokeBeaten

    BustedBrokeBeaten LoanSafe Member

    We just received our renewal HOI policy/bill in the mail yesterday. I am not going to renew the HOI but will instead let the bank force place their own policy. We moved out also, so the house is empty. If we let the bank get the insurance, what kind of insurance can we get to cover our butts if someone gets hurt on the property? I guess we could reup our HOI, but we've have had to deal with the insurance company's suspicions that we are not living there by telling them someone stays there, and I'm afraid if something did happen even with the policy in place that they would not allow a claim once they investigate and find out the property has basically been abandoned for 10 months.

    I've heard something about an umbrella policy and will research that more but wonder if anyone has faced this issue and how you dealt with it. Any advice is greatly appreciated.

  11. puppyted

    puppyted LoanSafe Member

    I kept up our homeowners insurance to protect us in case someone came on our property.
    The day the house was sold at auction, I cancelled it.
    Stopped paying the HOA.
    Feeling very good about life right now.
  12. crazyeyes

    crazyeyes LoanSafe Member

    We're still paying or HOA and insurance but no property taxes. We're afraid if the bank takes out their own policy it's going to make it even harder to eventually work out a deal if it comes to that. Our friend had the bank lower their principal to 110% of market value provided they pay all back taxes and everything. Something to keep in mind. Whatever you do get a lawyer to fight the bank. It's your right.
  13. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Which state is your friend in and who is their mortgage servicer? We have not been seeing any principle reductions from any servicers.. Except for a lucky few recently with Ocwen.. If property taxes/insurance are not paid by the homeowner, the servicer will generally add escrow to your account to ensure they are paid..
  14. crazyeyes

    crazyeyes LoanSafe Member

  15. movingalong

    movingalong LoanSafe Member

    We had our home insurance canceled because our insurance company knows our home is vacant. WF also received copies of this cancelation letter. I just received a letter from WF and an email demanding proof of insurance on the abandoned property. One other quick note is the sheriffs sale is this week and we haven't paid the mortgage in several months. Should I be worried about this? They will put a policy in place, right (maybe they have already)? I was feeling okay with this whole process but this has me anxious again. Evan, can you or someone else on the forum put my mind at easer on this?
  16. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Hello movingalong,

    I'm sorry we were not able to get back to you sooner and it seem the sheriff's sale did go through. But to benefit others who may have the same question or are in a similar position, the lender will step in and place their own policy on the property if your insurance has been cancelled..
  17. doneinca

    doneinca LoanSafe Member

    We have a rental property in CA that is vacant and going through forclosure. The bank notified our insurance that the property was vacant so our insurance company cancelled the poilcy after we confirmed it was vacant. I tried to get an umbrella policy to cover us in case someone gets hurt trying to break in, etc, however they would only give us a policy that strickly excluded that house. Safeco does not offer vacancy insurance so now the only insurance on the house is the bank imposed policy. It will not cover us. My biggest fear is the house catches fire and burns down a neighbors house. We would be liable for the damage to the neighbors house. The NOD was filed 12/27/12 so hopefully we are on a fast track. Last payment was Aug 2012 so we maybe on a fast track forclosure - we hope.
  18. shabu

    shabu LoanSafe Member

    So we live in FL and just stopped paying (mortgage). Our insurance and taxes are not in escrow. I did not pay the taxes (due in March) and got a letter from Citi that they will add to payment (start an escrow I believe). We pay home insurance monthly to State Farm ($550 /month - ridiculous) - is it best to just call and cancel this ? vs keep paying vs stop paying but don't officially cancel? Thanks for any thoughts...
  19. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Sorry for the late response, but to answer your question they are going to escrow your taxes (and likely insurance as well) regardless whether or not you continue to pay them yourself. This is common practice once an account has become delinquent and/or the borrower has applied for some type of assistance such as loan mod or short sale..
  20. DebitFree

    DebitFree LoanSafe Member

    My insurance and taxes are included in my escrow, however I have not made a payment on the mortgage since December 2010. During this entire time the bank has continued to pay my insurance and taxes, however today I got a letter in the mail saying my insurance will be canceled at the end of the month. It appears the bank did not renew my insurance. I'm puzzled as to why they would want their asset to be uninsured? So I guess my situation is the other side the bank got rid of coverage? Wonder why they would do such a thing?

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