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In Default - do I need Hazard insurance?

My home is 93 days in default; we are trying to short sale to prevent foreclosure. We moved out of the house on 10/15 as there is a pending offer. I wanted to know when should I cancel hazard insurance? Money is tight, and I am having a hard time keeping up this cost. If the short sale fails, and we go into foreclosure, do I still need to keep hazard insurance on the property? by crypt930 from Panama City Beach, Florida. Oct 26th 2018 Reply

Mark Collins (ahfund)
#129 ranked lender in Florida - 13 contributions

Lenders can use forced placed insurance to protect the home in case of a need. The New York Department of Financial Services created a web page to explain the process in their state. It would be similar to the process in other states: Good luck with the sale.

Oct 27th 2018
Sunny Singh (916Mortgage)
#354 ranked lender in California - 18 contributions

Keep it until YOU are no longer the owner. You never know what could happen, if the sale goes through or doesn't, and what could end up resulting in case you needed the insurance (forced placed, property damage that could have been covered, now your responsible, etc) Good luck and we hope everything works out good for you!

Oct 28th 2018
William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

So long as the property is in your name, you have an exposure for liability.. so the short answer is yes.. you should maintain the insurance,, Also, if you let the insurance lapse.. then the lender will "force place" a policy on the property.. this insurance is very expensive and would be added to your outstanding balance.. Since Florida is not an anti-deficiency state.. you can be liable for the lender loses, fee's and costs associated with having to foreclose on you. It's best to consult your attorney for more specific information on your exact scenario, but in general.. it's best to keep the insurance active. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

Oct 30th 2018
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