Q: Home is in foreclosure and just received a refund check for cancelled home owners insurance policy. Can I cash this?
Sheriff sale to be held in October, but lender is entering into a short sale agreement in the next 3 weeks.
A:
Risk of loss follows title to the real estate. You do not say whether the foreclosure sale has been held, or whether the sheriff's deed has been issued to the successful bidder. Nor do you say who caused the cancellation of the home owners insurance. But, "can" you cash the refund check? Yes. If the check came to you in error, it does not appear to be your fault. And I assume that the premiums were being paid by the mortgage lender, from an escrow fund for taxes and insurance that was funded by your monthly mortgage payments. Cash the check and see what happens. If your mortgage lender demands the money, make them prove to you that they are entitled to the proceeds of the check. My gut sense tells me the mortgage lender got all the relief to which it is entitled in the foreclosure judgment.
You may well have remaining personal liability to the mortgage lender for some deficiency between the sale price of the property and your loan balance, but cashing the insurance premium will not have a significant effect on that liability or the amount thereof.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
