Homeowners insurance after Chapter 7 discharged.

[ssc2761]

I have a question. My BK was discharged 7/7/10 and one of my houses was surrendered. BofA sent a letter that the homeowners insurance that was being paid via my escrow account was cancelled since I no longer occupy the house. They wanted me to get insurance or they would get lender placed insurance that is more expensive. My attorney told me to get insurance myself. It is very expensive and I got it and paid the first month. That is when it gets wierd. The lender then turns around and pays the homeowners insurance premium in full, covering one whole year and I get a refund check from the homeowners insurance provider. They paid the insurance premium from my escrow account, which was negative! I don't understand it. Will they be billing me for the insurance at some point? Or will they just eat and write off that cost. I wish they would just start foreclosure process so I can move on.

My last payment made was February 2009, which was over 1 1/2 years ago and I haven't even gotten a NOD and BofA has only tried to contact me via phone call a few times. Is there anyway to speed up the foreclosure process? Do I need to worry about the homeowners insurance being billed to me? Should I just rent the house out since I'm not there. If BofA wants to take forever I might as well rent it. Any responses are greatly appreciated. Thanks !!!

[tcreegan]

Hi ssc2761,

Is there anyway to speed up the foreclosure process?

I have heard of folks contacting the lender and getting a "cash for keys" offer. Basically they signed the deed over and left the house ready for market. Some folks even got $$ for doing this !! Not sure if it makes a difference, but one person contacted the real estate agent employed by the lender, and not the lender itself.

When our lender (GMAC mortgage) found out the property was vacant they put their own insurance on the place which has been nice.

Tom in Colo

[ccsjoe]

ssc2761,

Unfortunately there is no way to speed up the foreclosure process. You may attempt calling the bank multiple times (think creditor harassment calls-now it's your turn) to see if this will spur action, but you can not legally force them to hurry up. Tom is correct in the cash for keys piece, I went through it myself, however....at this stage, all you can do is call the bank and let them know your intent and that in exchange you may need some relocation assistance. The bank will most likely not be in a negotiating position until the foreclosure happens and your name is off the title. At that stage, you will then be working with a realtor who will be representing the bank. Of course all this is moot until the bank forecloses.

[justfiveofus]

If the house was surrendered as part of your bankruptcy I'm not sure why it's your responsibility to have insurance on it.

When our house went into foreclosure and we knew we'd lose it for sure and the debt would be gone with the bankruptcy we cancelled our insurance. The lender put insurance on it (we weren't living there) and it all went away with our BK.

[CatwomanMN]

My Chapter 7 was discharged in July, 2010 and BofA has been repeatedly sending me notices of the insurance lapsing and that if I don't supply them with insurance info they will buy it. Well, I ignored them because the house was in the BK. They just sent a letter in late Dec that they have insured the home at a cost of over $3000.00!
Does anyone know if they can come after me for this? I live in MN, I have disability payments from former employer which will end July, 2011 so I can't afford anything. I have already lost all that I ever owned and am living with my daughter.

[debee]

My Chapter 7 was discharged in July, 2010 and BofA has been repeatedly sending me notices of the insurance lapsing and that if I don't supply them with insurance info they will buy it. Well, I ignored them because the house was in the BK. They just sent a letter in late Dec that they have insured the home at a cost of over $3000.00!
Does anyone know if they can come after me for this? I live in MN, I have disability payments from former employer which will end July, 2011 so I can't afford anything. I have already lost all that I ever owned and am living with my daughter.

No, they can't force you to pay the insurance. You can ignore them. Someone in their insurance dept. probably sent the stock letter without realizing you'd abandoned the property and included the loan in bankruptcy. You are not liable for lender-placed insurance.