House in foreclosure, lender trying to fail an insurance claim...?

Question:

My friend's house is in foreclosure but she continued paying the homeowners insurance in case something happened to the house before it was auctioned.When she moved out, she took the dishwasher with her. Supposedly the house sold in auction on July 18. She just rec'd a call from her insurance company saying that the mortgage company had filed a theft claim for the dishwasher and a hole in the wall. Can the insurance company file a claim against her insurance? Something just doesn't seem right. How can they sue her for the balance of the loan and try to make her pay for the repairs?? Can anyone shed any light on this?

She did not have the right to take the diswasher with her. A dishwasher is a fixture, attached to the home through hard wiring and plumbing.

What your friend probably did, since the house was getting foreclosed, is she probably trashed the house, didn't clean anything up, and just left whatever garbage she didn't want.who did she think was going to pay for that? The lender?

No...she is. It's called a deficiency judgement...any money collected at auction that doesn't cover the balance due, the lender can seek a judgement against the homeowner for the balance...that is why when people have a foreclosure, they usually have a Chapter 7 Bankruptcy right behind it.

People think that just because they get a home foreclosed on, that they have already lost everything and can do whatever they want to the house.your friend, learned a very expensive lesson.

yes...the insurance company can and has come after her...part of the lawsuit will also be for the repair of the damages, a new dishwasher, and misc charges (ie plumber etc).

the law says anything that is connected to the house - stays... your friend should have just left the house without any fuss. the cost of a new dishwasher for her in the future would had been less than this lawsuit.

once the award is given to the insurance company, they will come after her earnings and most probably garnish her wages to ensure payment.

sorry to hear of your friends' plight - good luck :)

Yes, they can file a claim against the insurance. In fact, they can charge the balance remaining of the auction and garnish her wages...they (the lenders) don't do this often but they have the ability and right to do so. Technically, what she did was stealing and they could do more than just civil claims and insurance forms. They could report her for fraud or other criminal complaints.

At any rate, if the only thing that happened was an insurance claim, she shouldn't complain and make a big fuss, because they could have done so much more.

For more information about the foreclosure process and how to invest in them, see below.

House in foreclosure, lender trying to fail an insurance claim...?

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