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Who pays forced place insurance after short sale closes?
REMINDER for all short sale listing agents to make sure that their sellers DO NOT CANCEL their home insurance. Even if the sellers are behind on their insurance payments, they should not cancel it. It could be part of the negotiations with the lender to ask the lender to pay off back taxes and back insurance.
Received an inquiry via Trulia from agent who read my blog about Forced Place Insurance
She asked: "Do you know if my seller is responsible for this bill?"
"Hi I was doing some research on forced placed insurance and ran across your blog. I closed on a short sale and my seller just called me saying she got a bill from an insurance company. She called the short sale negotiator that closed our transaction. He did not know why my seller received this bill either."
Who pays? My initiial thought was that the responsibility rests on the borrower who should contact the bank to negotiate the resolution.
BUT! There are news stories about bank scandals, and they involve Forced Place Insurance
Next Bank Scandal? Forced-Place Homeowners Insurance
BofA Leak Exposes Possible Force-Placed Insurance Fraud
 


WHAT IS FORCED PLACED INSURANCE?
Definition : According to USLegal.com
Force placed insurance is ... more

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