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Mary Alice

Forced to take Insurance on second mortgage though lost in foreclosure.

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In 2010 we lost our house to foreclosure. We had a second mortgage on it which we have been paying, and now are down to $5000. The bank that just took over our second mortgage sent us a letter that states we owe $212 a year on hazard insurance on the foreclosure house. Can this bank legally do this: Take out hazard insurance on a house we no longer own and make us pay it? We have never missed a payment on our second mortgage, ever!

Thank you for your help

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51 minutes ago, Mary Alice said:

Can this bank legally do this

 

Yes. It's in your mortgage contract that you carry insurance on the house. If you don't, your contract allows the mortgage company to buy it's own insurance and charge you for it. The insurance covers the lender as its interest may appear. Even if there is no longer a property securing the loan, the insurance fee is charged even though the mortgage company would never collect on it.

 

Did you tell the person who wrote you that letter that you no longer owned the property and that there is nothing to insure? If yes, what was the response? If no, maybe you should have done that before coming here.

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