Please Help

[JamesOrr]

Thanks for asking this question. It is both important and urgent for you to get straightened out since there are some issues with the property in its current state based on what you described.

First, you will need to contact your attorney to make sure that the transfer was done correctly to the daughter and and that you have done all the paperwork correctly for your purchase subject to.

Second, you're right to fix the insurance. With the guidance of your attorney, you will want to make sure that you talk to your insurance agent and get a new insurance policy. Having an owner-occupant policy with a tenant there is only asking for trouble and gives the insurance company an opportunity to potentially deny claims. So, if you think about, you're not properly insured right now at all. That's a very dangerous position for you especially since you bought the property subject to.

It seems like you're also asking if changing the insurance will cause problems with your buying the property subject to. Maybe, and I am guessing, you're concerned that the bank will discover the transfer and accelerate the loan (call the loan due). This is a valid concern and one to discuss with your attorney. Your attorney can talk to you about how to properly disclose to the lender your purchase of the property subject to and talk to you about any due on sale or due on transfer clauses. I've not looked at your note but with most, using a trust does not "prevent" the lender from being able to call the note due. Many gurus teach using a trust to keep your name off public record and to conceal transfers from lenders (we can discuss the ethics and potential fraud of trying to hide stuff from lenders in another post). However, the use of a trust is still a transfer of interest and the section that talks about using a trust that does NOT trigger the due on sale or due on transfer clause requires the initial owners to remain beneficiaries and has very specific limitations. Go ahead and read it that section of the note yourself. You should have got a copy when you bought the property or get it from the daughter. These are things your attorney can talk to you about though as to how to properly deal with it including proper disclose to the lender.

So, the short answer is: talk to your attorney and your insurance agent. That is the correct advice.

[moellerryan]

Talk to multiple insurance agents and don't stop until you find one that can help you.  Get good referrals in your area too.

I am more concerned about how your deal is structured though.  I recommend looking into acquiring new financing to get the previous owners completely off the deal?  Again don't stop until you find a solution.

[SharisDelgadillo]

Thanks for sharing this, since I have little bit information about insurance.
What happened next, please tell me.
Because if that kind of situation occurs in front of me, then I should know what should I do.

[psyleflockhart]

Go to the bank and tell it all to them. I'm sure they have ways to find about the policies you want.

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It is easier to commit murder than to justify it. -Aemilius Papinianus