Subject to insurance question

[Andy M.]

I've been doing sub to deals for a while but I have never run into this problem quite like this before. The first mortgage lender (Ocwen) is asking for evidence of insurance and my agent supplied it but the borrowers are listed as additional insured not the insured. Ocwen is not recognizing the policy that I have in place because the borrowers are not the primary insured. Because they are no longer the owners on the deed they can't technically be the insured (according to my insurance agent) due to something called "insurable interest". As of right now Ocwen is forcing me to buy their lender placed insurance policy at a premium of $1000/year because they won't recognize my insurance because the borrowers aren't the primary insured.

I have encounters this problem before and other lenders have been okay with the borrowers being just an additional insured. anyone else ever encountered this problem before? It's getting a little frustrating.