Legal Question in Real Estate Law in California
House Insurance
Our mortgage company is not paying our house insurance. I've switched insurance companys once because they did not pay and the policy was canceled now they are not paying the new company. We've been in our house 7 months and whatI understand it is we have not had house insurance at any time. They keep saying the check is in the mail to the insurance company but it is never recieved or if the check is sent there is always something on the check that is wrong so it has to be sent back. I spend hours on the phone with the insurance company and the mortgage company trying to get this figured out and just get the run around. Do I have any legal grounds?
3 Answers from Attorneys
Re: House Insurance
It sounds like you have an impound account. If you are making payments to the mortgage company for insurance, and there was a fire or other situation that would normally be covered by insurance, then the lender would be liable under a negligence cause of action, as well as a breach of contract.
Depending on who the lender is would determine who you could complain to regarding their inaction.
Re: House Insurance
This is very peculiar because mortgage companies are usually very insistent upon insurance coverage. My guess is that you misunderstand the situation, but it is also possible that the mortgage servicer (firm or person to which you send the mortgage payment) is making a mistake. What do your payment coupons or receipts or statements show? Is part of your payment for insurance? Is there a balance for insurance impounds shown? By the way, are the property taxes being collected, impounded and paid properly?
You need to get this straightened out, or explained to you, ASAP, and I suggest handling all communications with the insurance and mortgage companies in writing, and send inquiries by certified mail-return receipt requested.
If you then reach an impasse, take all your letters, responses, mortgage statements and your original loan documents to a local real-estate lawyer and ask for help. Paying for an hour or two of professional help will be worthwhile since failure to pay for insurance can get you into a peck of trouble in more than one way.
Re: House Insurance
You may have to file a law suit against the Mortgage Company to comply with their obligations under the note or have the impound account cancelled. I would be happy to review your note/deed of trust/correspondence and provide you with free consultation of your various alternatives.
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