Mortgate Co. trying to take Claim check

[SnowCajun]

Most likely, there is a clause in your mortgage that states that insurance proceeds will be used for restoration or repair of the collateral, and that if such repairs are not economically feasible, then the funds will be used to pay down the debt.

Does the mortgagee know that the insurance funds will not cover the expense of restoring the pool?

Thank you BoredAtty, that helps me understand things a little more clearly, that may be exactly what's happening. I have one question though, since her pool was insured would not at least part of that check be usable towards repairing the residual hole left by that antiquated pool since the homeowners are not wanting to replace it, and then the remainder sent in towards the mortgage, or would it only be looked at as having been coverage for the pool itself only and the homeowners responsible for the residual hole?

SnowCajun

 

[moburkes]

Finally, SnowCajun asked a question. In any case, yes, the insurance money can and should be used to fill in the hole - if the hole isn't filled in, the insurance company will cancel the policy because of the large risk that presents.

As to how old the pool is - that is absolutely, positively, 100% useless to the issue at hand.

 

[SnowCajun]

As to how old the pool is - that is absolutely, positively, 100% useless to the issue at hand.

Uh oh, that prompted another question! Why? Don't things with a limited life expectancy depreciate with age? Would something old and used up not be less valuable than something newer and in good shape? Seriously I don't know this in comparison to mortgage insurance and would truly like to know!

Finally, SnowCajun asked a question.

Okay.. so you didn't notice the five question marks in the last post to you .. I forgive you!

SnowCajun

 

[Grandma's house]

Just an FYI:

Since when does a pool add to the value of a house?

People pay money to fill in pools to sell their house.

I'd attack the argument that way. The mortgage company wants value. Not a pool.

Get proof to shows not having a pool doesn't change the value adversely.

Also,it seems pretty obvious that a large measure of this conflict is between you and your husband.

On a personal note I agree because I hate swimming pools. However a pool does add value. It is not a great sales tool unless your clients are looking to buy a house with a pool. Like a pole barn, or horse stables. They DO add value, but what if you have no use for a pole barn or horse stables? Does this mean the seller should sell it to you for less? When he may very well get a buyer that needs/wants it?

For real...I kid you not. A pool does add value Real easy. Go to zillow.com then go to a basic neighborhood in CA. where all the houses are the same and see the difference for sale due to having a lousy pool.

 

[moburkes]

Uh oh, that prompted another question! Why? Don't things with a limited life expectancy depreciate with age? Would something old and used up not be less valuable than something newer and in good shape? Seriously I don't know this in comparison to mortgage insurance and would truly like to know!

Okay.. so you didn't notice the five question marks in the last post to you .. I forgive you!

SnowCajun

Okay. This is NOT mortgage insurance. Mortgage insurance is life insurance for the amount of the mortgage. This is home insurance which is different. In any case, a replacement cost policy will pay to restore something in NEW condition regardless of the age of the item at the time of the loss.

 

[Grandma's house]

PMI, Mortgage insurance covers the loan from the portion of the mortgage that requires it.
For instance. The lender requires PMI for loans over 80% ltv. (loan to value) If home is worth 100k and you borrow 80k you do not need PMI, however will finance up to 90% cash out on a refi. and much higher on purchases.with PMI (Mortgage Insurance) to cover in the event of default.
F.H.A. requires M.I. for all loans because F.H.A. is insuring the deal in full.
What Is PMI?

PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI.

Benefits of PMI

PMI plays an important role in the mortgage industry by protecting a lender against loss if a borrower defaults on a loan and by enabling borrowers with less cash to have greater access to homeownership. With this type of insurance, it is possible for you to buy a home with as little as a 3 percent to 5 percent down payment. This means that you can buy a home sooner without waiting years to accumulate a large down payment.
Close enough.
You can however get lender paid M.I. with accepting a higher rate of interest. Not for an F.H.A. loan.

also..don't confuse Mortgage Ins. with Hazard Ins. these are 2 different kinds entirely.

 

[kikiwoman]

Mortgage Company trying to take my claim check

I did not select this mortgage company. My mortgage was sold to them. The only paperwork I ever got from this mortgage co., said hi, we own your mortgage and your ass, send your payments to us. Nothing else ever except for bills and tax paperwork at the end of each year. Buying this house came unexpectedly. The previous owner died, the executor of the estate was my ex-brother-in-law, who also grew up with my husband, he was also the deceased son. He came up to me one day and asked me if I was going to buy this house what would I give for it? Me being the obvious real estate expert that I am, said I don't know $53,000. Mind you this is a 2 story 3 bedroom, 2 bath, kitchen, diningroom, livingroom. Detached Garage, used to be a inground swimming pool, and a poolhouse. Also it has a 3/4 of a acre of land. Next thing I know I had lawyers calling me, I'm looking for a mortgage, blah, blah, blah....They wanted to dump the house and took what they could get. The appraiser said I got a great deal. They took my unoffical I thought John was just asking me a question offer. It happened that fast.

When it came to the insurance, I insured the house for double what I paid for it. According to them the swimming pool is considered an outbuilding and is automatically insured for 10% of your insurance policy. I didn't know about added value at the time or else I would of done it. The age of the pool doesn't matter. It's the price to replace it now. If the price is more than the outbuilding coverage then your screwed. I have since added the added value clause to my insurance policy.

As a footnote to the continuing soap opera: A supervisor in the loss draft department, sent in a request to release the funds to the main office. She feels that since there is no way to replace the pool with out us taking out a $10,000 loan in additon to the insurance check, that it ain't worth it. Now it's just a wait, see, and let bureauracy happen thing.

 

[Grandma's house]

I did not select this mortgage company. My mortgage was sold to them. The only paperwork I ever got from this mortgage co., said hi, we own your mortgage and your ass, send your payments to us. Nothing else ever except for bills and tax paperwork at the end of each year. Buying this house came unexpec.

You do not HAVE to select the mortgage. The old lender sold the paper to the new mtg. co. this has gone back 50-75 yrs. where lenders either merge, sell the paper, and they simply are being serviced by the new lender. You owe it. I get that you don't like it but it is what it is.

They did not change the terms of the loan but merely the address and name where to send in your payments/ I assure you that one of the forms you signed at closing was called a "servicing disclosure" that says that they may sell the loan. It happens ALL the time. Sometimes multi. times throughout the term.

Good Luck on that check. Do tell what ends up happening.