Triggering DOS Because Of Insurance Policy Change
Say you aquire a SFH sub-to and then rent it out or L/O to a tenant/buyer. You then purchase Homeowner's Insurance and request for Landlord's Insurance since it's no longer Owner-Occupied. Now assuming the existing loans were originally Owner-Occ, will the insurance co. notify the lender when they send a new Policy Declarations that it is now an investment property being rented and not a primary residence? Will this in turn trigger the DOS clause? TIA for the replies.
I suppoze it could. It's not very likely though. The lender is primarily concerned that their interest is insured. Its my belief that the event won't be scrutinized that closely. They will probably check to see that the coverage is high enough to cover their butts, and that the property address matches the loan, and that's about it. I could be completely wrong in this, but I've seen enough advice here on TCI from sources that I consider to be reliable to believe that it really isn't a major concern.
Good Luck,
Jeff
This may help clarify for you:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=472
If you have any specific questions, feel free to PM me. Hope it helps!
Tim