Consumption and Real Estate
Going to Foreclose 2nd House, can I cancel the insurance policy?
Question : Going to Foreclose 2nd House, can I cancel the insurance policy?
I’m 1 month behind my 2nd house payment, and can not afford to continue paying for it. Can I cancel my insurance policy for the house? Would the lender allow that?
I did not impound my tax & insurance, I pay those on my own. I can not afford to keep the house so either the bank take it back (I haven’t talk to the bank yet), foreclose (no payments will be make from now on), or short sell (does that mean I keep up the payment right?)
house insurance policy
Best answer:
Answer by go_lc_bears
If they are taking it back anyway, what can they do about it? I would worry though that it is still yours until the foreclosure is final, and if anything happens to it, you will owe a lot more money than what you’ll owe after they sell it.
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#2 written by kemperk 1 year ago
if you are about to lose it,
cancel it. save a few pennies.check this out–I did that a few
years back and the insurance
company had the stones to
try to charge me a fee for
cancelling early. They would not
reimburse me for pre-paid
fees.they had been prepaid.
–sorry you gotta run. cut your
loses.go
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I don’t know if this varies from state to state; but in Indiana, the cost of your homeowners’ insurance is figured into your monthly mortgage payment. The money is held in escrow until your insurance premium is due, and is paid by the mortgage company. You get to choose the insurance carrier, but the mortgage company is named as the “insured.”
If you are paying your own homeowners’ insurance, then try to cancel if you want. I’d bet there is some sort of clause that makes them notify the mortgage company if you do. I have no idea what recourse the mortgage company would have, as they REALLY do not want you to cancel the insurance policy on the home.
Long term, your best bet is to get with the mortgage company and try to work out a friendly surrender of the home. They might be willing to renegotiate the terms of your loan to “interest only” for a time, or perhaps a lower payment.
Lots of folks are in your situation. Good luck!