Yeah, I completely understand.

Paid $140k(few grand over the 70% rule), quoted $150k to complete the rehab. 

should a private lender ever ask for a 1% insurance paymentBefore completing a loan?

I have yet to complete a walk-through of the property and see what renovations may be needed (potential for HVAC and interior, but from my understanding the roof and windows were replaced within the last 7-8 years).

Blue Ridge is a complete mess at this point.

Along the same lines, they completely ignore all the things a good operator does on a daily basis to avoid the claims from arising in the first place.

Another thing is the insurance is sent to the bank from your insurance provider and the seller should never be needed as long as the documentation has been completed correctly.This is why you must vet the law and title office you are closing with to make sure they know how to handle these transactions. 

It's completely a result of mismanagement and staffing. 

I am curious to see what others say, but I am completely with you on this.

Regular schedule updates should be completed to track the progress vs. the baseline agreed upon schedule.