Underwater mortgages and foreclosures are a blight to Nevada, forcing many people to file Las Vegas bankruptcy. One thing that might be worsening these problems is how homeowner’s insurance works in the United States. Generally, homeowner’s are obligated to buy insurance for their properties. However, lenders have an interest in ensuring that the property’s insurance doesn’t lapse in case there’s an incident that damages it. If that occurs, like a hurricane, flood, storm, etc. then there is no payout and if the homeowner moves on, the bank must resell the property for even less than what it is worth. Consequently, banks will often buy insurance on properties once the policies lapse or the homeowner stops making payments, and then they charge the homeowner. This is called “forced-place insurance.” From there, though, things start getting weird. Here are five things to know about it:
The bottom line is that the best way to avoid a forced-place insurance scheme is by making the homeowner’s insurance payments yourself. Otherwise, the costs that are extended to you might push you into foreclosure. If that happens, you need an experienced Las Vegas bankruptcy lawyer who’s got your back.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation.