I am being foreclose on after filing for Chap 7. I have 4 months left until my redemption period ends and I found out that I need to insure the dwelling until then. Do I insure it for the amount that the lender bought it back for or the amount of what the home is worth? The value because of the neighborhood issues is $60,000 less than what was owed on it.
Lender bought it back for $95,000 (our loan had PMI on it) and it is worth $37,500 according to online. Which should I insure it for as a "replacement" price if it burns own? Thanks.
Laws relating to foreclosure and insurance can vary widely from state to state, so you should certainly contact an attorney or insurance agent in your state. Generally, once a home is foreclosed, the bank will put a force placed insurance policy on the property. You may want to check with the bank to see if there is already any coverage in place.
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