Dispersal of insurance funds .

My daughter is buying a mobile home from one of her coworkers. My daughter is to make payments to the coworker and she in turn is to pay the mortagage holder. For all purposes I guess you would call it a second mortgage. Since the coworker is still resposible to the mortgage holder the homeowners insurance is to remain in her name but my daughter will be paying the premiums.
Is there a statement that I can put into the purchase agreement that will protect my daughter in cases of a loss. Since the insurance is in coworkers name how will my daughter be assured of receiving compensation from the insurance company after the lien is settled with the mortgage company
My daughters credit is good but not long enough to get a loan on her own right now.

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by tailgunner45:
My daughter is buying a mobile home from one of her coworkers. My daughter is to make payments to the coworker and she in turn is to pay the mortagage holder. For all purposes I guess you would call it a second mortgage. Since the coworker is still resposible to the mortgage holder the homeowners insurance is to remain in her name but my daughter will be paying the premiums.
Is there a statement that I can put into the purchase agreement that will protect my daughter in cases of a loss. Since the insurance is in coworkers name how will my daughter be assured of receiving compensation from the insurance company after the lien is settled with the mortgage company
My daughters credit is good but not long enough to get a loan on her own right now.<HR></BLOCKQUOTE>

You were astute to raise this question. But please continue this by advising your daughter to have an attorney draw up the purchase contact. The method of sale is not a second mortage. And she will have other problems in addtion to the potential insurance issue. Some questions that you may ask her/her attorney: how will she hold title to the property, how will her equity position be protected, who will be responsible for real property taxes, repair and maintenance and other costs, what would happen and how would she be protected if the coworker does not pay the mortgage, would there be a collection account established), how would she be protected if the Seller puts a second mortgage on the property or refinances the first up to the maxium loan to value ratio, how is the monthly payments calculated, is there a set interest rate based on the pricipal balance of the sales price less the down payment or the sales price to the existing mortgage balance, and if she pays the exact amount of the mortgage payment, who gets the interest deduction for tax purposes, also who gets the benefit of the equity based on the reduced principal balance of the loan compared to the actual sales price, is there clear title to the property, will there be a survey, seller property condition disclosure statement, home inspection, environmental hazard inspection, etc.

So many unanswered questions, so little legal representation.