Hurricane Insurance requirement added by lender 12 months after closing.

[drumz]

What is the name of your state (only U.S. law)? Florida


I closed on my home on the Florida Gulf Coast right before Ivan and Katrina hit. About 12-16 months after living in the home our lender, Wells Fargo, said they had made a mistake and we needed Hurricane insurance, which they would be glad to provide for $4000 a year. We did end up getting our own from another company but it was well documented at closing we did not have specific hurricane coverage. We even questioned the lender while working on the loan to which we were told we didn't need it. We even have a letter from our fire/flood/etc. insurer stating no hurricane insurance was provided. We do not really live that close to the coastline and are on high enough ground that flooding is no issue. We tried to fight it because of the financial hardship it created but the mortgage company was neither polite nor helpful and said they would provide the expensive insurance if we did not find our own and we had no choice.

Can they make what amounted to about a 25% increase to our mortgage payment by just saying oopps we messed up, tough luck? Especially given that the loan had closed over a year earlier?

Thanks
Dave

[cyjeff]

I couldn't understand half of that.

Are you asking if a mortgage lender can require that the home they are financing be properly insured? Yes. Even if that insurance is a burden to the home owner? Yes.

You live on the Gulf Coast... I would think hurricane insurance would be a no brainer... but I guess not.

[drumz]

First of all your condescension is unnecessary.

But to put the question into terms you may understand.... isn't there a law that requires lenders to disclose the full cost of a mortgage upfront?

This allows a buyer to make intelligent decisions about the homes they are going to buy. Had I known about the extra monthly expense, I probably would have chosen a different property. The whole point is the lender stated it was properly insured at the time of closing.

Buying insurance in this state is actually brainless. If you lived here you would realize how many people never saw one dime of insurance money and have had no help from the state in holding these companies accountable. Claims are not being paid because flood insurers call it hurricane damage, and hurricane insurers call it flood damage. So the no brainer is to try to avoid the scam by dropping insurance, invest your money and rely on yourself.

And don't worry about the banks, they aren't holding the bag. Homeowners all over the state are responsible for having to pay their mortgages for destroyed homes whether insurance pays the claim or not.

Originally Posted by cyjeff

I couldn't understand half of that.

Are you asking if a mortgage lender can require that the home they are financing be properly insured? Yes. Even if that insurance is a burden to the home owner? Yes.

You live on the Gulf Coast... I would think hurricane insurance would be a no brainer... but I guess not.

[HomeGuru]

Originally Posted by drumz

First of all your condescension is unnecessary.

But to put the question into terms you may understand.... isn't there a law that requires lenders to disclose the full cost of a mortgage upfront?

This allows a buyer to make intelligent decisions about the homes they are going to buy. Had I known about the extra monthly expense, I probably would have chosen a different property. The whole point is the lender stated it was properly insured at the time of closing.

Buying insurance in this state is actually brainless. If you lived here you would realize how many people never saw one dime of insurance money and have had no help from the state in holding these companies accountable. Claims are not being paid because flood insurers call it hurricane damage, and hurricane insurers call it flood damage. So the no brainer is to try to avoid the scam by dropping insurance, invest your money and rely on yourself.

And don't worry about the banks, they aren't holding the bag. Homeowners all over the state are responsible for having to pay their mortgages for destroyed homes whether insurance pays the claim or not.

**A: what is the problem? Read your loan docs. The lender has a right to require insurance anytime during the loan term. You could get yourown or do nothing and then the lender will force place the insurance for you ( at a higher cost).