You are better to pay for a better insurance policy, do things right to limit your risk, (LLCs, fix things that are broken or hazards) and to treat your tenants right so that they don't want to sue you.

In your scenario you will be hit for the full PITI for your future primary purchase.

The landlord's dwelling policy could provide coverage here. 

The agent will prepare a commitment with requirements for closing including a deed from the party the insurer believes is authorized to sign the deed and any supporting docs they need to be comfortable in issuing a title policy to you w/o an exception for your concerns.

If he has a mortgage on his primary residence, then you need to take the PITI on his home mortgage and divide it by about .35 to safely determine the amount of NCF he needs to prove out.

I would view them the same as trampolines, and have the same policies if I were a landlord.

They can not get mortgage insurance, the mortgage is already issued and with the negative equity and two mortgages no mortgage insurance company would issue a policy against that.It sounds like you assumed it would be easy breezy to just turn your deed in and walk away and it is just not that simple.

All my rental policies remain same regardless of the month.

(not sure how many tenants will agree to sign this but I guess worth a try)7) pets - a very well defined pets policy, must have insurance or certificate for the pet, make sure all the shots were taken, obtain name of the veterinarian for references etc.

Evidently another tenant in the apartment had lost the little guy, even though I had a no pet policy at the time.