What to do with insurance bill

[Jf24]

discharged ch7, trying for mod but got denied and may be foreclosing but not served yet. Wanting to stay in house, heard mod is sometimes possible during forclosure.

I thought the mortgage co pays insurance. I just got a bill that it is due and has to be paid in 15 days. Wondering about the taxes as well. All was being paid in mortgage payments. Payments not made since Jan.

[tobee43]

we had an escrow account and never paid another dime. if you were paying it separately, that's most likely why you are getting the bill directly. IF the bank has always paid it, like in our case, the bank took the hazard insurance and the house was put under the banks "umbrella" policy.

as far as the taxes, believe me, your mortgage company will pay them, as i'm certain they don't want to lose your house over back property taxes. it all catches up, it just may take some time.

also, the rules may vary in your state. if you are staying in the house you may if you can pay the homeowners to protect your home. in our case we vacated our premises and the homeowners insurance company will only insure an owner occupied premise. i would check with them and let them know what's going on.

best of luck to you.

[Jf24]

So if I am staying in the house I should pay this insurance bill. What if I don't and someone gets hurt. Is it covered under banks umbrella policy?

[angles]

As tobee posted the insurance/taxes will get paid. The bank will not let its interest go unprotected so if you don’t pay the bank will. In our case the bank kept the insurance company we had and just paid the bill. If your uncertain about the modification I would not pay it until the bank decided if they will modify your loan or not. This way you are minimizing your financial risk.
As far as liability is concerned if someone gets hurt at your house you can be sued because you are still on the title. At that point I would contact the insurance company and let them handle it (even if the bank has been making the payments). I think that risk is pretty low for an owner occupied property and I really would not stress about that part of it and just focus on the modification.

[ValleYum]

So if I am staying in the house I should pay this insurance bill. What if I don't and someone gets hurt. Is it covered under banks umbrella policy?

Your personal property isn't covered by the bank's umbrella policy (aka: force placed insurance) nor are you covered if a liability suit is filed against you personally as the 'legal' owner of the home.

For under $200 for the year - we placed an $1m individual umbrella liability policy that is attached to our renter's and car insurance. We left an empty house (still not foreclosed on) behind after moving out this past month. Some insurance companies do offer vacant home insurance but in our case that was almost $1,000 per year which is why we chose the individual umbrella liability policy.

Our bank happened to pay the insurance while we lived in the house (trying to force a mod by not paying), but we were prepared to pay the homeowner's premiums if necessary to protect both our contents and us against any liability claim that could be filed personally against us (particularly since we would have to wait years to even be eligible to file any type of bankruptcy again).

So, if you are planning on living there, you could just get a renter's policy and let the bank force place their own coverage on the dwelling or you could just pay the homeowner's insurance premiums yourself. As always, check with your attorney and remember that your mileage may vary.