How do investors in Texas handle Subject 2 property insurance?

Question

We are close to being ready to do our first Subject 2, in the Houston area.

We have not been able to find a title company to close us.

StarTex said they didn't do them anymore.

Does anyone know a title company?

We also have not been successful in finding a property insurance company.  How do most investors handle the property insurance?

Thank you so much for your info.

We are feeling discouraged.

Kathy Hewitt

Greg H. · Answer

Not pompous at all.  And.....I surely do not comment on topics I am not familiar with either.  You might want to read up on a Sub2 transaction in Texas before you tell me it is a simple as a phone call to USAA.  My recollection is they will not touch a Sub2.  The lender will require the Seller(again... the person who is on the note) to be an insured party.  Failure to do so can result in forced insurance and possibly exercising the due on sale clause contained in the Deed of trust

Jacob Pereira · Answer

@MIke Hewitt, you should pay attention to @Greg H.'s advice rather than that of @Mark Poulton. The downside of asking for advice on the internet is that you only get advice from people who post on the internet.

Greg H. · Answer

You have no idea what you are talking about.  The seller( the one who secured the mortgage) will need to be on the policy

Greg H. · Answer

The OP is talking about a Sub2 purchase.  It is more complicated than a phone call and most insurance companies have no idea how to proceed.  The seller/note holder will be listed as additionally insured.

Account Closed · Answer

Just so I can be educated on this, can you point me to the Texas General Statute that requires the insurance in the manner you describe in a subject 2 deal?  I did a quick search and didn't turn up anything, but I am in NC and I am more familiar with NC State GS than Texas.  Thanks.

Account Closed · Answer

That is pretty much an old wives tale.  This is not the 80s.  Institutional lenders have tens of thousands, if not hundreds of thousands of foreclosure cases pending and more in the pipeline.  It makes virtually no difference if the lender knows or not.  1) they are getting paid as per the contract 2) Their property is insured wth them and you and you are a fully authorized person on the account.  Amidst all the chaos, an auditor is not going to recommend foreclosure on a note that is getting paid.  They have too many other notes that are not.  I know what you are saying, but to me it just isn't necessary.  You are telling the OP that your way is the only way and it just plain isn't.  Like everything in life, I make decisions on probability.  And the probability of what I am saying versus what you are saying are virtually the same.  I suppose if the property had 250K in equity, they may choose to foreclose because they are greedy, but that is not known nor the deals I tend to deal with.

Account Closed · Answer

See, now you are talking about the lender.  Which isn't needed for insurance.  You can always not escrow.  You can ignore their demands that you add the borrower to the insurance.  You really think they are going to foreclose on you because of that?  Give me a break.  Do you always follow the rules others dictate to you?  The OP asked how you get insurance on a sub 2 deal.  You are answering a different question.  You are answering the question, how do I appease the mortgage company in regards to insurance on this deal which is completely different.  Perhaps you need to think outside the box more critically before telling me my poop stinks.

Account Closed · Answer

Maybe with your insurance company they will.  My insurance company won't even know about the person on the note.  You are pompous my friend.

Account Closed · Answer

Insurance companies don't care.  My insurance company has never once asked if I own the property of if I have my name on the mortgage.  The OP asked how you get insurance.  That is simple.  Call an insurance company.  This is real, real easy.  If the OP wants info on the escrow strategy, that is easy as well.

Account Closed · Answer

I use USAA for all may insurance.  I just call them and say I have another house.  Any broker can get you insurance.  This should be pretty easy.

How do investors in Texas handle Subject 2 property insurance?

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