Posted by JT-IN on January 13, 2004 at 17:51:47:
Your Mtg and Note docs (or Deed of Trust) should require that the Debtor carry such insurance on the dwelling, and also name you as an “additional insured”.
In doing so, you will in turn be notifed if coverage ceases for any reason, and have the right to place insurance on the dwelling in the event that the owner defaults on that obiligation. Of ocurse if you have the need to insure the dwelling, the cost of such insurance is a recoverable expense.
It is advised that you have an Atty draw up docs to cover the Mtg and note… or use standard form, Freddie Mac docs for your state, which cover such events.