Yet Another Problem

[pambysue]

I am surrendering my home in the bankruptcy (owe much more than its worth) and have already received a foreclosure summons/complaint. the attorney said that because there is no equity, the bank will just go through with the foreclosure. anyway..long story short..sometime ago, due to being one day late on my homeowners insurance, it was cancelled. I had tried to get insurance again but was told that no one would 'underwrite' a policy. so, I have no homeowner insurance!! What do you think will happen with this? Is this going to cause an issue with getting my Chap 7? I dont quite understand all of the bankruptcy 'fraud' issues..but, could this be some kind of an abuse that would cause further problems with surrendering the home and letting the bank foreclose?
I really am quite ignorant to all the bankruptcy laws..so, I apologize for all the questions I have posted lately.

[HHM]

I don't think it will be an issue in the BK. The mortgage company will simply take out a policy and charge you for it, the insurance will simply become part of the fees and costs placed on top of the mortgage balance when the house is auctioned, but they really have no recourse because your giving up the house anyway.

[LostOne0069]

yep, don't worry about it... since you're giving the house back and any "unsecured" amount left over (including those fees and other charges) will be discharged in the bankruptcy. You're fine, this isn't a problem at all.

[Spartan]

Do you think the mortgage co should be notified of the lack of insurance ASAP, so they can take whatever steps necessary to preserve 'their asset'? Isn't there a clause in the law somewhere that states you have to exercise reasonable care? I remember vaguely about something like that.

[pambysue]

EEEK! Now I am worried again! LOL. If I dont LAUGH ..I will start crying.
Now that I am in foreclosure and filing BK on Dec 8, I am afraid if I call the mortgage company and inform them that there is no insurance, they will rush to push this foreclosure through before I file. I received ths summons/complaint to answer within 20 days ( by 11/27). could they push the foreclosure through before I file? I am in NY state.
Thankyou everyone for all your support through these trying times!

[HHM]

Don't worry, foreclosures have a very strict timeline, they can't rush it...nor would they, really. They really don't gain anything.

[pambysue]

Thankyou HHM. that kind of puts me at ease a little. Do you think then that I should contact the mortgage company regarding the lack of insurance? My lawyer isnt aware yet that my insurance was cancelled and he had originally told me not to contact them at all being as I am filing BK.

[HHM]

Thankyou HHM. that kind of puts me at ease a little. Do you think then that I should contact the mortgage company regarding the lack of insurance? My lawyer isnt aware yet that my insurance was cancelled and he had originally told me not to contact them at all being as I am filing BK.

No, no reason to tell them. Plus, they probably already know. When an HO policy is cancelled, a loss beneficiary (i.e the mortgage co) is usually notified by the insurance co.

[pambysue]

Thankyou HHM! I will keep you posted on my progress!! You have been so helpful in my time of need and I greatly appreciate it.

[CindyLou]

I'm sure they know already, plus do you think you are the first person in foreclosure that doesn't not have homeowners insurance??????? Nope! BTW, if you can afford 20-30/month you should seriously consider a renters type policy on your contents!!!

[Spartan]

No, no reason to tell them. Plus, they probably already know. When an HO policy is cancelled, a loss beneficiary (i.e the mortgage co) is usually notified by the insurance co.

oh yeah. That's right. The mortgage firm is the beneficiary. I forgot. Sorry...

[pambysue]

Thanks everyone I appreciate the help. And yes, Cindy..I am going to get a renter insurance policy for my contents when i move. The rental property requires it. Plus, since my homeowners was cancelled, I have been paranoid that something would happen! we had a major storm on Oct 13th here in Western NY and all trees fell down, basements were flooded, power was down for a week! Thank God, i only had cable wires ripped out of my house! my sister lost everything in her basement and my ex did also! Furniture..washers & dryers, furnaces, etc. Someone was looking out for me! Insurance is something we really need! Granted, my sister & my ex both have homeowners, but nothing was covered by their policies. My fear was that something like that would happen to me and I am losing my house in foreclosure..I truly want to leave my home looking halfway decent and not in a shambles. I am to blame for all my predicaments..not my mortgage company and I don't want to screw them over.

[CindyLou]

check with an insurance co., but I think you can get a contents only policy now.