Legal Question in Real Estate Law in California
Hi,
We purchased home last month and our HUD closing statement states that Home Insurance will be paid by lender. After around 20 days my Insurance agent called and he told me that Home Insurance was not paid, so I contacted Title company and they mentioned that they received written instructions from lender that lender will pay for Home Insurance and as such it is note on HUD closing statement, I contacted lender about this and they are blaming it on title company for wrong balancing of amount. For now I have paid Home Insurance, but issue remains unresolved.
I have been following up with lender for last few weeks and now lender lady has stopped replying to my emails.
I was wondering what are my options in such scenario?
thanks in advance for your replies.
1 Answer from Attorneys
A home-purchase with a new loan typically involves three kinds of insurance: 1. A title-insurance policy protecting the lender; 2. a title policy protecting the buyer; and 3. homeowner casualty insurance protecting lender and buyer against fire, etc. type hazards.
#3 involves recurring payments - once a year, once a quarter, etc. - and is almost always paid for by the homeowner, although if the homeowner fails to provide such coverage, the lender can and will step in and buy or provide the coverage and re-bill it to the owner.
#1 and #2 involve one-time payments, and practices differ from region to region within the state, and even from deal to deal, as to who pays the premiums. I mention all of this because there may have been a misuderstanding, with one party thinking "#2" when the other had in mind a type "#1" premium payment, or maybe even #3.
I don't think I can be of any further help beyond suggesting that everyone be sure which of the three kinds of insurance polict is at issue here.
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