How is the homeowners insurance carried in a subject to deal? Usually this is the information that tips off the Primary lender and can trigger the DOS.
A change of insurance beneficiary is the most common way a lender discovers a transfer of interest in the borrowers property.
However, if you transfered title into a land trust, the new beneficiary under the insurance policy will be the trustee of the land trust. The lender will probably not object, since it will assume the seller has implemented an estate planning device.
If the beneficiary of the trust is assigned, the lender will not be notified since the insurance beneficiary (the trustee) has not changed.
This is especially true where a lender has contracted to use a "servicing" company to deal with most facets of the loan.
There are a few ways to handle the insurance. The easiest is just to leave it in the homeowner's name and do a change of address and a power of attorney to act in their behalf for insurance purposes.
I doubt that the lender would call the loan due even if they did find out, as long as it was still performing. It costs big bucks to foreclose and banks want to make money, not spend it. Worst case would be that they would want you to formally assume the loan (my opinions only). I have never met a subto investor who has had a loan called yet.
Sorry pbodys (Just luv your handle, Clif ) I just don't like land trusts very much in a purchasing cover. It's a hassle and a larger upfront cost. Again, my opinion only.
Hi jimhnet,
A change of insurance beneficiary is the most common way a lender discovers a transfer of interest in the borrowers property.
However, if you transfered title into a land trust, the new beneficiary under the insurance policy will be the trustee of the land trust. The lender will probably not object, since it will assume the seller has implemented an estate planning device.
If the beneficiary of the trust is assigned, the lender will not be notified since the insurance beneficiary (the trustee) has not changed.
This is especially true where a lender has contracted to use a "servicing" company to deal with most facets of the loan.
Hope this helps,
Clif
There are a few ways to handle the insurance. The easiest is just to leave it in the homeowner's name and do a change of address and a power of attorney to act in their behalf for insurance purposes.
I doubt that the lender would call the loan due even if they did find out, as long as it was still performing. It costs big bucks to foreclose and banks want to make money, not spend it. Worst case would be that they would want you to formally assume the loan (my opinions only). I have never met a subto investor who has had a loan called yet.
Sorry pbodys (Just luv your handle, Clif ) I just don't like land trusts very much in a purchasing cover. It's a hassle and a larger upfront cost. Again, my opinion only.
Roger