Who is responsible for home insurance and property taxes after discharge?

[Wantmypeace]

Tobee...what DID you do, then? I just want to clarify. I know this is an old post, but our house has a pool, and when the NOD comes and we know we're only a few months out from the sale, we will move to a rental. I need to know how to insure the house (if I need to) during that gap of time that it is vacant. What kind of insurance did you get to cover yourself because of the pool, spa, etc...

[tobee43]

Exactly. We feel that by renting it out after we leave, gives us some needed income plus protects the property which we seem to care more about than the bank. So if we cover our liability with the umbrella policy, they can cover the structure or not, I don't really care.

we would have the done the same thing...but we had ponds and pool and spa...way way too much liablity...and that scared us...otherwise we would have done the same exact thing.

[scooter6251]

absolutely correct...banks have what is called an "umbrella" policy as well for their foreclosure properties....

in as much as one PP mentioned about having to maintain insurance until the deed transfer...well...what if never does???

the bank may hold the property forever...

Exactly. We feel that by renting it out after we leave, gives us some needed income plus protects the property which we seem to care more about than the bank. So if we cover our liability with the umbrella policy, they can cover the structure or not, I don't really care.

[tobee43]

Our BK 7 was discharged. We're leaving the state but plan to rent the house until foreclosure, maybe 1 or 2 years (nothing started yet). Our homeowners insurance is paid until Oct. When we relocate, we will get renters insurance on our new residence and plan to get an umbrella liability policy. It states that it covers rental property so it should cover us for liability. I'm sure the bank will put insurance on the structure when the homeowners ins runs out.

absolutely correct...banks have what is called an "umbrella" policy as well for their foreclosure properties....

in as much as one PP mentioned about having to maintain insurance until the deed transfer...well...what if never does???

the bank may hold the property forever...

[scooter6251]

Our BK 7 was discharged. We're leaving the state but plan to rent the house until foreclosure, maybe 1 or 2 years (nothing started yet). Our homeowners insurance is paid until Oct. When we relocate, we will get renters insurance on our new residence and plan to get an umbrella liability policy. It states that it covers rental property so it should cover us for liability. I'm sure the bank will put insurance on the structure when the homeowners ins runs out.

[debee]

I would just call your current/previous insurance provider and see if they will insure you for contents and slip/fall while you are in the process of moving out. (If that's in fact why you have stuff left in a house you're not living in anymore). Once you're completely out, there are insurers who will do vacant house policies but it seems to depend on location. I'd just start calling insurance companies for quotes. (Thanks for the kind words.)

[daylate]

debee-Thanks for another great post. Your postings throughout this process have been a great help and very educational. Now to help you add to your legend (at least in my mind :-) ) if you go the renters insurance route after discharge if you have possessions there but don't live there can you still go that route?

if that is a no (and I'm thinking probably it is) then do you know of any companies that will just write liability insurance?

[tcreegan]

Hi all,

debee mentioned this, but just a reminder, don't forget to check to see if homeowners insurance is part of your mortgage payment. Almost all mortgage payments have an escrow set-up that the insurance gets paid out of. These payments are usually quarterly, but sometimes bi-annual or annual. Depending on the pay-out date, you might have months of insurance prepaid.

When we vacated the property, there was ~1month prepaid from escrow. We called our lender (GMAC) and gave them a heads-up we had vacated and were not picking up any insurance. They promptly put their own insurance on the place and sent a guy over to winterize and clean the place up.

I worry about not having liability insurance on it, since we are still on the deed. Its a risk we chose to take, almost over though, trustee sale on the 28th.

Tom in Colo

[goodyphilips]

Its nice to know that BK takes lot of load off your back. It seems it worth it in every sense of term when nothing is working, economically, in our lives.

[KatieEllen24]

Thanks debee. Thought it sounded too good to be true.

[debee]

Katie, if you are doing a stay-and-pay, you need to keep the taxes and insurance current or you will be in default. If you want to stay in the house, keep current on everything.

In the case of the OP, they are letting the house go into foreclosure. In dontburnthep's case, the house is already vacant.

[KatieEllen24]

So if we don't reaffirm our 1st and 2nd, but intend to stay and keep paying mortgage and taxes, we don't need to pay the insurance on the house? Just for our belongings? Am I hearing that right?

[debee]

Yes, renter's will protect you while you stay in the house, but you won't be wasting any money on the structure. When the bank gets lender-placed insurance, they name themselves as loss payee. You have no coverage of any kind in that scenario. So you take care of you.

ps. #2. ---> If you have an escrow account, you might have paid homeowner's insurance ahead by several months to a year. You can call the insurer to find out and plan to place a renter's policy into effect when the homeowner's expires. Good luck to you!

[capamando]

As dontburnthep points out, you are still the owner until the foreclosure. However, property taxes always attach to the land. You're not personally liable for them. The county will get a lien on the property. The bank has to pay them first from any sale proceeds. Not your problem.

You don't need to insure the building. If it burns down, the bank will be able to sell the charred remains and the sizzled lot. If they can't get enough money from the sale to pay off your loan, they can't pursue you for the deficiency because your personally liability will have been discharged in the bankruptcy. If they don't insure their investment, that's their own stupidity. Not your problem.

Get a renter's policy for your possessions and personal liability.

eta: If you have HOA, pay that until foreclosure because your personal liability remains post-bk.

Debee,

Great piece of information...so if I understand you correctly, if I intend to stay in the house until the bank forecloses on it...the best thing that I can do is get renter's insurance?

Thanks for clearing this for me and others..

So....what is the second secret? lol...

[debee]

Wow, another thing our attorney told us incorrectly. Renters insurance? Really? We're still paying our regular home owners.

Sorry about your attorney. You're certainly not alone. Does your insurance provider know that the property is vacant? There might be something in the policy indicating that the coverage terminates for vacancies longer than a month (or whatever time-frame). You might actually be paying for coverage that you don't even have.