Where Did I Go Wrong?
Hi all:
I recently took my personal residence Sub 2. My plan was to take out a HELOC to pay the underlying mortgage off, and use some of the extra equity to start financing my marketing machine. I got my docs for the HELOC in the mail today, and one of the docs they require to close is a copy of the insurance declaration page.
I called the insurance company, and asked them to add me as an additional insured. I explained that I had POA, and then she asked me if I was on the deed. Here's where I think I went wrong. I SAID YES. She had me fax her the POA, and a copy of the deed.
When I talked to her a short time later, she said that since the property was now mine, the existing policy would end up cancelled, and a new policy would have to be written.
This isn't too big a deal since I plan on paying off the underlying mortgage anyway, rendering the DOS clause pretty much irrelevant.
How can I avoid this in the future? Do I just say that I'm not on the deed, and go forward with it that way? I don't feel comfortable lying, and I'd much rather run my business ethically. Thanks in advance for any insight.--Steve
If you purchased the property subject-to and recorded a deed showing your interest you are on the deed. You are not on the loan.
The insurance needs to pay to the lender first and then if there is any left they should pay you as the owner recorded.
John