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Old 01-16-2012, 06:14 PM
 
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Default Homeowners Insurance, Underwater, and a Disaster

A homeowner is deep underwater but has always made payments and has no intention of walking away from the home (in this case, a trailer). The home suffers major damage in a disaster. In a case like this, does the insurance money go to the homeowner to replace the trailer, or will it go to the bank toward the mortgage?
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Old 01-16-2012, 06:18 PM
 
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Quote:
Originally Posted by sll3454 View Post
A homeowner is deep underwater but has always made payments and has no intention of walking away from the home (in this case, a trailer). The home suffers major damage in a disaster. In a case like this, does the insurance money go to the homeowner to replace the trailer, or will it go to the bank toward the mortgage?
Why don't you check with FEMA's website? Those are the guys who back lending for situations like this.

http://www.fema.gov/assistance/dafaq.shtm (broken link)
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Old 01-16-2012, 07:00 PM
 
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I would think it would go to the person or entity filing the claim. In your case, to you, the homeowner, not the bank, and not the contractor hired to repair or replace your home. Ask your insurance company.

Last year I had an insurance claim. After submitting repair estimates to the insurance, they sent me the check. They did not want to deal with the contractor and didn't even care who I paid to do the work or how much it actually cost.
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Old 01-16-2012, 07:01 PM
 
Location: North Metro Atlanta
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Depending on the type of Ins. Home owners ( a mortage/loan ) tied to the trailer, the check would go to the bank 1st. The personal property portion will go to the home owner, If its more like renter Ins, then the check would to to the person for there stuff.


Added: Co/Worker had water pipe break and it caused over 50K in damage, all his checks for the repairs go to the mortage holder 1st to sign, then to him to cash. All are 2 party checks.
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Old 01-16-2012, 08:47 PM
 
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Originally Posted by flyonpa View Post
Depending on the type of Ins. Home owners ( a mortage/loan ) tied to the trailer, the check would go to the bank 1st. . . .

. . . checks for the repairs go to the mortage holder 1st to sign, then to him to cash. All are 2 party checks.
So it went to the bank to sign, but to the homeowner to cash.
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Old 01-16-2012, 10:21 PM
 
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My claim involved no personal property, only the house, and the check came directly to me. It may depend on how the insurance is written. In my case, I am listed as the insured. The insurance company sends a fax to the bank every renewal cycle so they know the house is insured.
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Old 01-17-2012, 06:15 AM
 
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Usually a check is cut to the homeowner written out to both the homeowner and the bank that holds the mortgage. You will need to find someone at the bank to sign off on that check-sometimes you have to mail it to a central location. Do NOT sign your name on the check until you get it back from the bank. Send the check via Fed Ex so you can track the check, ask that the bank do the same (they may charge you but who cares).

Depending on the loss (if it is a total loss or whatever), you will have to fill out forms at the insurance company detailing everything you owned to get the full payout. You will still owe the bank money, whatever is left on your mortgage, so hopefully you had it insured for enough.
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Old 01-17-2012, 07:48 AM
 
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My friend's trailer is a loss, but the contents are not. If the insurance helps her get a replacement, and it doesn't affect her mortgage, she will be okay. It's good to know about the two signatures; I'll pass that along. Thanks.
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Old 01-17-2012, 07:57 AM
 
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Quote:
Originally Posted by sll3454 View Post
My friend's trailer is a loss, but the contents are not. If the insurance helps her get a replacement, and it doesn't affect her mortgage, she will be okay. It's good to know about the two signatures; I'll pass that along. Thanks.
She will have to pay off the mortgage on the one trailer and get another for the next one though. The bank won't just "replace" one trailer for the next on the loan.
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