I’ve noticed that a great many of the REOs in the area I am looking in have obviously suffered vandalism . I was wondering , don’t banks have insurance on REO homes? Why do they not file claims to get the homes repaired so that they can sell them in better condition.
Is it simply an issue of time , they don’t want to go through the trouble of filing claims ,etc?
Most banks are out of state and it would be difficult for them to fix the property and flip it. Have you ever dealt with a contractor before. You think they are tough to deal with when you can see them in person try it out of state with out the right team.
The bank will sometime put forced placed insurance on a property if the homeowner is not paying for it when in pre-foreclosure. This way if it burns or something they are covered. The damage is caused by the homeowner who owns the property at the time. So if they cause the damage and they own it the insurance is not going to cover it. Once the bank owns the property they can put insurance on it and if any further damage is caused I believe then they will be able to file a claim.
Yeah…but it seems that if the bank has a bunch of REOs in a certain area and they are a Nationwide bank they …and they have received BILLIONS in bailout money…they should be able to hire someone to file insurance claims , and get the work done.
Jon your post in inaccurate.
If the homeowner is not paying the insurance policy, regardless if home is in preforclosure or not, the bank will place a forced policy on the home which will entitle the bank to recieve money if claims are placed.
Many large banks have local contacts that do check on the homes on a bi-weekly or monthly basis, especially if they have many homes in an area. They realize homes need to be sellable as well from vandalism. Of course their claim process is longer and harder then a typical homeowner but many times they recover the monies.
Also if the home is in foreclosure process and a claim is paid thru the forced policy, the bank is obligated by law to apply that payment to the balance owed. The bank can not take the payment as pure profit.
Yrush2000 this may have been true in the past but not 100% of the time will the banks place forced placed insurance on a home in pre-foreclosure. We specialize is short sales and we are trained to ask those questions to loss mitigator and the seller if there is insurance and who is paying it. Believe it or not sometimes has no clue whether or not the seller is paying the home owners insurance or whats going on with the property. Sometimes you tell the bank the home is being vandalized to come board the property up and they do nothing.
Yes the banks have property management teams the hire but they are not up on every house in this climate
Until the bank take the property back the seller owns the property.
If they have homeowners insurance and they inflict damage to the property the home owners insurance is not going to cover it.
If you read my post I said that the bank does get forced placed insurance on some if not most of the properties if that is the case. As to the coverage I am not an insurance agent so I can not say what would be covered and what would not be. In a forced placed insurance scenario I believe the coverage the bank gets is probably pretty limited. Why would a insurance company who wants to make a profit insure a property that is in distress to full coverage. Chances are if the seller is going to be foreclosed on the are not keeping up with the property and they may trash it themselves if they get mad enough. Many properties are trashed because of the people that lived in the property. Would you agree?
I did not talk about a vacant property being vandalized by a 3rd non-related party. If the property is vandalized by a 3rd party because the property is vacant them I am sure the bank has the right to a claim if they have the proper insurance. I said they banks will place forced placed insurance on property when a seller is not paying but you cannot say that 100% of banks are on top of this.
So feel free to add to the conversation but my post is not inaccurate.