Lack of Homeowners Insurance...

dcat22March 24, 2010

Soo.....

Found out I don't have homeowners insurance today. Got a letter from the bank looking for verification. Talked the insurance company... Turns out they dropped the policy about 11 months ago, when the payment the bank sent was either never sent or not received, or? I can't find or at least never opened a notice about it.

Thankfully nothing has happened in the meantime.

So, anyway...as I'm shopping for a new quote, my question is: Should I just get it quickly, and verify? Or tell my bank what happened? I'm a bit worried about telling the bank, and what they would do? Thinking getting the policy back in force in the next few days and saying "here" may be the best route.

Just wanted any thoughts... Thanks!

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nycefarm_gw

If the bank is supposed to be sending the payment, you would think they already knew?!?!? It's their mistake, so why should you be worried about it...

    Bookmark   March 24, 2010 at 4:08PM
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dcat22

Well, in any case I don't have homeowners insurance right now...and just sending the payment at this point won't restart it. But I do agree...I wish I could just tell them to fix it. And no clue why it took them (or me, I'll take responsibility too) just under a year to realize it....

(Once this is fixed, I'm going to ask to remove the escrow requirement and handle it myself...as I can at least make sure it's done! :))

First house...live and learn. A lot already...

    Bookmark   March 24, 2010 at 4:24PM
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azzalea

If I'm reading your post correctly, the premiums were collected by the bank, but never got to the insurance company. Why would you NOT be down at the bank, in the president's office complaining that they collected money from you, that was supposed to be paying your insurance and now you find out they never paid it? Why would you consider letting them off the hook? Why would you EVER consider letting them do that to you in the future?

There's also the possibility that they DID send the payment, and the insurance company didn't properly record it (wouldn't be the first time, there, either. You absolutely must go to the bank and get to the bottom of this, find out where the money went, why it wasn't paid or credited, etc. You have a claim against the bank, IMO. You may also want to discuss this with your lawyer, so that you do the right things in the right order.

You have a major complaint with your bank--DO let them know that you're extremely unhappy about this. After that, make a complaint with your state agency that regulates banking.

And for heaven's sake, do NOT let the bank pay your insurance, taxes or any other bills from here on out. We never have, never would. We like to make sure those things are paid, on time, in full. We don't trust others to take care of our bills for us--as you unfortunately found out, they aren't always as responsible about doing it as you would be.

But bottom line here is that the bank is wrong. You have to address that. DO NOT let them off the hook.
For your own sake.

    Bookmark   March 24, 2010 at 4:50PM
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partst

I think the first thing you would do is have the bank send you a check for all the insurance money you sent in for the escrow account. If they didnÂt send it to the insurance company for a year now there should be enough to buy new insurance. I would also check and make sure they paid your property taxes if that is part of your escrow account.

    Bookmark   March 24, 2010 at 4:53PM
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dcat22

Thanks... I probably will be there tomorrow. (Sorry, this wasn't what I planned for my first post here...been lurking for quite a while.)

Still accounting, but looks like my relatively small insurance payment may have never left the escrow...masked a bit by higher than expected taxes. I had confirmed with the tax authority the prop tax was paid, at least. Shame on me for not paying better attention, too.

In the meantime, I downloaded the detail loan history itself. I'm not making this up: It looks like a team of untrained monkeys applied the payments to principal and interest.

Date Principal Interest
3/10 35% 65%
2/10 22% 78%
1/10 16% 84%
12/09 19% 81%
11/09 16% 84%
10/09 24% 76%
9/09 10% 90%
8/09 16% 84%
7/09 10% 90%
6/09 29% 71%
5/09 26% 74%
4/09 2% 98%
3/09 18% 82%
2/09 19% 81%
1/09 0% 100%
12/08 34% 66%
11/08 18% 82%
10/08 15% 85%
9/08 1% 99%
8/08 15% 85%
7/08 23% 77%
6/08 21% 79%
5/08 0% 100%
4/08 0% 100%

...this should be a smooth progression of almost all interest to slowly increasing the principal portion -- but seems almost randomly applied? Right? (I replaced actual amounts with percentages of the total. All are automatic payments on the due date, for the exact amount due.)

The net end result is only about $200 off an amortization schedule I just ran.... A little extra to principal... Is there something I'm just missing on how this would be applied?

This...is gonna be fun. :/

    Bookmark   March 24, 2010 at 5:13PM
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maifleur01

If like most your payment was due on the first one of the questions I would be asking is why no credit until the 9-10 date. Of course you may have requested that date.

    Bookmark   March 24, 2010 at 11:29PM
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colorcrazy

Welcome, dcat22

You certainly picked a memorable "entrance" to THS!

Best of luck in dealing with the bank. They usually insist on handling the escrow as part of the loan conditions (because they make money on being able to hold your money). But (if your lawyer agrees) you might be able to tell the bank that you will not take them to court if they will drop the escrow requirement. Just charge them the lawyer fees, interest on your insurance escrow, and any other fees you incur.

Your mortgage payments (Principal/Interest) are all over the ball park. That should be an interesting discussion. Do you have a variable rate loan? If so, I would suggest refinancing.

    Bookmark   March 25, 2010 at 9:55PM
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dcat22

Well...it did turn out the insurance money was never sent, and is still available. About to sign on a new policy, and the bank "unlocked" my escrow account so I can transfer money in and out like any other account (I have checking with them too) and get this taken care of (for now).

Meeting with them next week about the way payments are applied, what happened, future escrow policy, etc...I'd much prefer to manage it all myself now.

Fun week. :)

Thanks for the help...looking forward to other threads with ya'll folks...on hopefully less "interesting" issues. ;)

    Bookmark   March 26, 2010 at 4:47PM
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