No. of Recommendations: 0
Carrying homeowner policy is required. Mortgage companies receive notification that a Homeowner's policy is currently in force, and notification if it is terminated. The mortgage holder would know if the policy is a homeowner or landlord policy.

OK... not to encourage anything nefarious, but... this is *easily* worked around;
An occupant owner who wants to convert to a rental, without alerting the servicer/lender by changing the hazard insurance coverage, can simply leave the owner-occupant coverage in place, and buy a separate landlord policy (perhaps even from a different insurer, to make sure there are no internal reporting screwups accidentally alerting the servicer/lender.)

This isn't a secret workaround... and the costs are not at all prohibitive (they are a fraction of the premium charged for investor rates,) which is why servicers still do curb-view driveby inspections, and use other occupany audit methods.

Print the post  


Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.