Los Angeles, CA · Member since 2016 · 565 posts · 391 votes
I am in the process of getting approved for a HELOC and the Bank wants to see a new declaration page with their name on it as a loss payee on the home owner policy. I have never seen this in my previous loans, even though it makes sense to me for them to become a payee after approving the loan.
Can some of you investors and lenders shed light on this matter? Especially on when this needs to be done. (before or after approval? )
I am in the process of getting approved for a HELOC and the Bank wants to see a new declaration page with their name on it as a loss payee on the home owner policy. I have never seen this in my previous loans, even though it makes sense to me for them to become a payee after approving the loan.
Can some of you investors and lenders shed light on this matter? Especially on when this needs to be done. (before or after approval? )
I assume you're talking about the mortgagee / additional interest box. You didn't see it on your previous loans because something in your initial disclosure packet authorized us to go behind your back and get it from the insurance provider directly, and your lender probably did just that. :)
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
9y
@Kevin Lefeuvre its an absolute must in most cases. If the bank has an equitable interest in the property they also want to be additionally insured. It makes no difference to your insurer and your rate is the same.
I am in the process of getting approved for a HELOC and the Bank wants to see a new declaration page with their name on it as a loss payee on the home owner policy. I have never seen this in my previous loans, even though it makes sense to me for them to become a payee after approving the loan.
Can some of you investors and lenders shed light on this matter? Especially on when this needs to be done. (before or after approval? )
I assume you're talking about the mortgagee / additional interest box. You didn't see it on your previous loans because something in your initial disclosure packet authorized us to go behind your back and get it from the insurance provider directly, and your lender probably did just that. :)
Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
9y
Kevin,
When a Bank or Mortgage company is added to an Insurance policy as a Mortgagee they are a Loss Payee as part of the Mortgagee clause. You have not seen that term "Loss Payee" because is normally used to referred to someone with a financial interest in a vehicle or equipment or other Business Property.