Property insurance not available for wrap around mortgages?

[Rav Ram]

I'm in the process of getting a 30 year fixed loan, then doing a wrap around mortgage to a buyer. The problem is that the lender is requesting insurance, and apparently, according to my attorney, after I do the wrap around mortgage, the borrower also needs to have their own insurance as well because my insurance won't cover them (or maybe not even me) because i no longer own the property. I gogled it, and i'm not seeing any providers of insurance that allow you to cover your new buyers as well as you to avoid buying double property insurance.

PLEASE HELP!!!!

Please let me know if anyone has this experience

Thanks

[Gautam Venkatesan]

With the new Dodd Frank laws you should be using a RMLO to qualify your buyer (I am assuming the buyer is not an investor but retail buyer), a knowledgeable title company/attorney to prepare the paperwork and a 3rd party note servicing company at a minimum. If none of these parties can refer you to a suitable insurance carrier or broker then I would ask around your local REI groups.