Question
California
I was recently sent a letter from FEMA and my mortgage lender notifying me that my residence has been placed in a flood plain region. My lender also informed me that they are requiring either elected or force-placed insurance on their portion of the equity. Can my lender force me to get insurance after I've already signed the loan documentation? I've read all the fine print and the only thing related said, "we may request payment in full of your loan amount if your actions/inaction threaten our interest in the property."
MMiller8846
Answer
California
I was recently sent a letter from FEMA and my mortgage lender notifying me that my residence has been placed in a flood plain region. My lender also informed me that they are requiring either elected or force-placed insurance on their portion of the equity. Can my lender force me to get insurance after I've already signed the loan documentation? I've read all the fine print and the only thing related said, "we may request payment in full of your loan amount if your actions/inaction threaten our interest in the property."
MMiller8846
Q: Can my lender force me to get insurance after I've already signed the loan documentation?
A: Yes; I've read all the fine print and the only thing related said, "we may request payment in full of your loan amount if your actions/inaction threaten our interest in the property."
Answer
Isn't there something in the loan documents explaining insurance requirements, that they will provide it at your expense (which does not necessarily protect your interests) if you fail to provide your own insurance to sufficiently protect their interests in the property (including deductable limit)?
Even if not, that catch-all you quoted should do it.
My refinance was delayed asking if I had flood insurance, because my city is split between 2 counties and they got a FEMA report from the wrong county. I went to the FEMA website and got a mini-map that confirmed that my address was not in a flood plain, but the refinance was still delayed a couple of days until they had their official report.