Homeowner's Policy
Hey, we have completed the paperwork to purchase the home subject to. No problems thusfar. But because the homeowner is so far behind with his payments (6.5 mos), his policy expired 2/24/04. His insurance company told me in order to have the policy re-instated, it will have to be re-written. I was then told (by another investor) to call and asked to be added as a loss payee when we do so. The insurance company said no, but I could be added as an additional insured. I would then draw up an addendum (that homeowner would sign) stating that any proceeds paid from the homeowner's policy would then be given or paid, due to a fire or other destructive occurance, be then paid to xyz equities (our company).
Sound ok? On another note, we are working towards a full modification. If this happens, does this affect the insurance payments that are in arrears, or will we simply pick it up fro here forward.? Thanks in advance.
Suntzu18
You could shop for another insurance provider who will add you as a loss payee.
What reasons have they provided for their responses other then they might be upset about not being paid?
John
[addsig]
My take on the insurance issue:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=472
Hope it helps,
Tim
Guys thanks for the quick responses. To answer the first question, they did not really sound upset, they simply stated that I could not be added as the loss payee if john (the homeowner) still owned the home.
Norrist, I read your article....thanks so much. I have a close friend that owns his own insurance agency. I am sure he would write a new policy for me as a NOO landlord policy. No problem at all. Should I do anything at all with the old homeowner's policy? Get it reinstated with the original homeowner as the first insured? I am trying, as you mentioned, to avoid any chance of the DOS clause getting invoked.
If I dont, will the lender (WAMU) get a notification that it has not been reinstated?
Thanks again guys.
Suntzu18
Having 2 policies could really create the havoc. I think a few of the sub2 experts will back me when I state to not give the DOS too much worry....