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#1471777 - 11/23/10 06:37 PM Escrow and HOA pays insurance for property -
Tryin-2-Comply Offline
100 Club
Joined: Apr 2003
Posts: 202
Hills of TN
We have a home loan applicant who lives in a retirement community with a homeowners association. They carry a personal property insurance policy (contents), but it doesnt have any dwelling coverage. The policy that is paid through the HOA dues covers everything but betterments, improvements, and contents.
What are we required to escrow? Do we have to require that he get partial dwelling coverage, then escrow that? How do we reflect this on the HUD / GFE?

Thank you in advance for your assistance.

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Lending Compliance
#1471845 - 11/23/10 07:29 PM Re: Escrow and HOA pays insurance for property - Tryin-2-Comply
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
What type of dwellings are these, 1-4, condos, cooperatives, etc.?

If condos refer to 226.35(b)(3)(ii)(B).

Quote:
They carry a personal property insurance policy (contents), but it doesnt have any dwelling coverage. The policy that is paid through the HOA dues covers everything but betterments, improvements, and contents.


This doesn't compute. Does it or does it not cover contents?


You have every right to require insurance to protect your security interest which may include requiring your borrower to get a unit owner's policy.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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