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Homeowner's Insurance Refund--Do I keep this?

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    Homeowner's Insurance Refund--Do I keep this?

    Hello,

    So I just found out I'm close to a foreclosure sale and the date has been set. I'm getting a refund check from my homeowner's policy that is made out to me. I'm not sure if this is something I keep since the insurance was paid out of my escrow? At the time it would have been paid last year I was current on my loan payments. Since then I've had bankruptcy and foreclosure. The insurance company said the policy is mine and this is why they send the refunds to me but I'm not sure if I can keep this or if I'm supposed to sign it and mail it to the mortgage company. I filed pro se so I don't have an attorney I can ask.

    #2
    The money in the escrow account held by your mortgage company belonged to you. It was simply held in trust until insurance and tax payments were due. If the mortgage company was entitled to the refund, you can bet that the insurance company would send the check to them.

    If your mortgage was discharged, so was all of your liability to the mortgage company.

    If the amount refunded was in the escrow account on the date you filed BK, it was technically your asset that should have been listed on your bankruptcy petition and exempted if possible. I don't think my attorney listed my mortgage impound account as an assets and I bet it is a detail often forgotten.

    If anything, you would give the refund to the BK Trustee, assuming he wants it. I know you were discharged, but don't know if your case was closed. I do not know what your legal obligations are at this point as they relate to the bankruptcy.
    LadyInTheRed is in the black!
    Filed Chap 13 April 2010. Discharged May 2015.
    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

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      #3
      Thanks:-)

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        #4
        I was about to ask this same question. I got a refund check of almost $500 from the insurance company along with a notification that they are cancelling my policy in late July (about 2 weeks after the foreclosure sale). As I don't desperately need the money for anything this minute, I plan to deposit it into my savings account... so I guess it can sit there for a while in case any questions arise.

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