Can your mortgage company force you into buying flood insurance?

gunzijjistaff · Joined: 07 Apr 2009 Posts: 458 6.81 Dollars($)

i think if mortgage company is forcing you for the payment then they should also take some part in the payment of the premium of the flood insurance .they also owe the property don't they?

gmakerley · Posted: Sat Apr 11, 2009 8:53 am Post subject:

wow (again and again)

no, a mortgage lender who provides the funds for a person to purchase a home DOES NOT own the house also.

flood insurance is required if a property is in a flood hazard area; this is mandated by the federal government. and, of course, it provides protection for the homeowner.

you're off base here, gunz.

Guest

my lender is forcing me to get 100% replacement value of house in flood insurance! mortgage is upside down!! I did not finance 100% so why should i have to pay for 100% of insurance, I heard this was not legal. help please.

gmakerley · Posted: Tue May 12, 2009 10:23 am Post subject:

it is legal, e.

insurance must cover the entire replacement value in order to be valid, in any circumstance. the mortgage balance and the value are not necessarily ever the same number.

eric1 · Posted: Tue May 12, 2009 7:48 pm Post subject:

Under these conditions, it would make much more sense to buy an existing home than building a new one.

gmakerley · Posted: Wed May 13, 2009 1:13 pm Post subject:

not necessarily eric. in our area, we have a lot of large, old homes. replacement cost on them is astronomical in many situations, due to the materials, etc. that went into them. to try to rebuild some homes would be substantially higher than building a new home to different specifications would be. the insurance costs, as a result, sometimes go over the rainbow. sorry - not sure if that's an appropriate metaphor.

All times are GMT - 7 Hours
Previous 1 2
Page 2 of 2