P
poorbananas
Guest
I live in Southern California. Currently working with a lender to aquire a second on our home. Signed all the loan docs last monday (7/23/01). Have passed our 3 day right to cancel. On Friday, 7/27/01 our lender informed us that we need to increase our homeowner policy to cover the total amount of our 1st and 2nd mortgages. Our insurance agent states this is not necessary because homeowner policies pay for replacement costs of the home (ie. pay the contractor to rebuild after fire). The policy doesn't pay off the outstanding loans on the home. Our loan docs state that we need to provide,
"Dwelling insurance covering the real property secured on said loan. The amount of insurance must be at least equal to the outstanding principal balance of the loan, plus any existing senior lien balances or the replacement cost, whichever is less. Lender required said insurance to remain in effect for the full term of the loan".
I pointed out to them that our policy covers replacement cost, however they still insist that we increase the insurance coverage. This will cost us an additional $550 a year. The loan agent then suggested we up our coverage, then reduce again in a couple weeks after the loan has closed and checks are mailed. This also goes against what is stated in the contract.
We are in the unfortunate position of having to make a quick decission so we can close by tomorrow. We opted to increase the coverage temporarily.
Question: What is our leagal recourse? Who can we call to lodge a complaint? Can we sue, and if so, for what?
Thanks!
"Dwelling insurance covering the real property secured on said loan. The amount of insurance must be at least equal to the outstanding principal balance of the loan, plus any existing senior lien balances or the replacement cost, whichever is less. Lender required said insurance to remain in effect for the full term of the loan".
I pointed out to them that our policy covers replacement cost, however they still insist that we increase the insurance coverage. This will cost us an additional $550 a year. The loan agent then suggested we up our coverage, then reduce again in a couple weeks after the loan has closed and checks are mailed. This also goes against what is stated in the contract.
We are in the unfortunate position of having to make a quick decission so we can close by tomorrow. We opted to increase the coverage temporarily.
Question: What is our leagal recourse? Who can we call to lodge a complaint? Can we sue, and if so, for what?
Thanks!