Harvey to hit mortgages if flooded homeowners stop paying

[Bob Malecki]

Interesting article linked below, and a cautionary one for anyone who considers buying debt in natural disaster areas where the home's value is lower than the debt. With the home being "underwater" in both respects, why would a homeowner want to make their mortgage payment if they can't get their insurer to cover the repairs. Something to consider when you are buying debt in these areas..........

http://www.msn.com/en-us/money/realestate/harvey-to-hit-mortgages-if-flooded-homeowners-stop-paying/ar-AAqZoEW

[Chris Seveney]

Note: i am not an insurance agent

In cases where insurance covers the incident and the home is determined a loss of use, the bank gets paid first from the insurance policy.

If there is significant damage typically the insurance company does not cut a check until after the repairs are done - so in most instances if the house had $50k in damage the insurance company does not cut them a check without confirming the repairs were done.

Similar case is if a home burnt down. The above is contingent on borrower having proper insurance of course