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Interesting Mail From My Homeowners' Insurance Provider
 
Today's mail brought a letter from Grange Insurance, informing me of an endorsement which changes my homeowners' policy.
Since it was written in legalese gobbledy-gook, it took a few reads through to figure it out. But finally, I think I have the gist…
If I default on my mortgage, my lender or lenders will be the ones to collect if the house burns down.
Even more interesting: My insurance company can pay off my lender and deny payment to me, and in so doing, the insurance company will gain ownership of "all securities held as collateral to the mortgage debt."
However, it further appears that if the amount of insurance paid isn't enough to cover the mortgage balance, I'll still be liable.
I don't intend to default on my mortgage payments, but still, I wonder…
What was THAT all about?
I don't have any facts, so this is just speculation. But I'm wondering if folks have started burning their homes in order to get out from under the mortgage and avoid foreclosure? And maybe, for people who had some equity, it seemed like a way to put a few dollars in their pockets at the same ... more

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