Insurance coverage in a wraparound loan

[Alicia Marks]

We are selling a property via owner finance, but wrapping our current mortgage. The confusion is how to handle the insurance. I am getting different answers as to if we both need to carry coverage with us making the first loan and them naming us on their policy. Other answers I have seen are that we carry to the first mortgage but the end buyer pays the premium, or some other option. Double coverage seems like a waste of money to me and a possible finger pointing fiasco if a claim happens. We are using a service to set everything up as well as a third party loan services. We want to make sure we are acting according to Texas law, but don’t want to spend on something we may not need.
TIA!

[Jason Taken]

Quote from @Alicia Marks:

We are selling a property via owner finance, but wrapping our current mortgage. The confusion is how to handle the insurance. I am getting different answers as to if we both need to carry coverage with us making the first loan and them naming us on their policy. Other answers I have seen are that we carry to the first mortgage but the end buyer pays the premium, or some other option. Double coverage seems like a waste of money to me and a possible finger pointing fiasco if a claim happens. We are using a service to set everything up as well as a third party loan services. We want to make sure we are acting according to Texas law, but don’t want to spend on something we may not need.
TIA!

Two policies might be the right move to protect both interests. If title is vesting into your mortgagor, then I would imagine they would want a policy as well.