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Ron · Joined: 21 Nov 2009 Posts: 2 1.86 Dollars($)

I'm closing a Refi with AimLoan on a 3unit owner occupied in San Diego. I cancelled the signing (mobile Notary) after having questions on the AimLoan contract on stricter (?) hazard insurance requirements than my existing 6 year old GMAC mortgage. The new contract allows who ever buys the mortgage from Aimloan (Wells Fargo is buying the mortgage) to require me to purchase earthquake and flood insurance, if they so choose. Im not in a flood zone. A second stipulation allows them to provide this coverage and charge me, if I decline. This could be $1000 a month or more on three units at a later date. Insurance companies are leaving the California fire and earthquake market.Two of the three units are rentals and a stipulation also assigns all rents directly to the mortgage holder if there are any defaults. The big question here is, Is this a normal hazard insurance contract (in 2009) which can require earthquake insurance which could later easily double the mortgage payment later? I'm retired, I don't have to refi and don't know if it's worth the extra risk.

gmakerley · Posted: Sat Nov 21, 2009 1:00 pm Post subject:

your final 8 words told the tale, ron. i agree with you. if you don't need to do the transaction, then it's not worth doing, especially if you're potentially looking at a substantial increase in your monthly payment.

i don't know diddly about california except that it's pretty warm and way out west, and i know even less about real estate and mortgage requirements, but if i were in your shoes, i'd back away also.

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Hazard Insurance