Legal Question in Real Estate Law in Virginia
I had a fire in my house, I thought the money held in escrow at closing was to c
I had a fire in my house and was informed by my insurance co. that the policy had lapsed. At the closing 18 months earlier I had to set aside funds in escrow to cover homeowners insurance. 12 months later my mortgage was sold to another bank. I was never informed that they did not hold funds in escrow nor was I told that I had to obtain insurance on my own. Now they are claiming that they are not responsible for me not having insurance. No one can tell me what happened to the funds in escrow. Help!
1 Answer from Attorneys
Re: I had a fire in my house, I thought the money held in escrow at closing was
When you purchased the property, you executed a HUD-1 statement which would indicate whether money was escrowed for homeowner's insurance. Also, the settlement agent was required to make sure that property was insured at the time of settlement. Unless the initial insurance policy lapsed for non payment, about which you would have received notice, I think the settlement agent, or whoever the initial insurance carrier was (unless the settlement agent did not pay for the coverage from closing), owes you a policy or damages for your loss.
If on the other hand, there was no escrow arrangement and the initial insurance policy
lapsed for non payment of premiums and you received notice and did nothing about it, then you may have a problem with your loss as well as the mortgage holder as, you are required to maintain coverage under the terms of the loan.
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