I have a single-family property in california with very severe fire
damage.  My insurance company has notified me that they are
non-renewing my policy.  There is no chance that I can have the damage
repaired by the time the non-renewal takes effect.   This puts me in a
tight spot as apparently no insurance companies (including the CA Fair
Plan) will insure a property that has damage.

I am concerned that my lender will call my loan once the property is uninsured.
I would like to know what the process will be if they do call the loan.

Would their calling the loan be considered a foreclosure?
What will the timeframe be?
At what point would a foreclosure affect my credit?
Are they likely to be open to negotiation?

(Note: as a seperate line-of-inquiry I am investigating if my insurer
can non-renew coverage when I have not yet received a settlement from
a claim and have existing damage; you do not need to address this in
your answer)

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Clarification of Question by bogonflux-ga on 08 Jan 2005 11:23 PST

>Would your lender know that you were uninsured?
The insurer sent a notice of non-renewal to me.  I am assuming that
they have also sent one to the lender.  I have not yet contacted the
lender about the non-renewal.

>Were you required to report the fire damage to your lender? And did you?
To my knowledge I am not required to.  I did report it to them though.

>Is it safe to assume that your current insurance comp is going to repair
>the damage?
The settlement should be sufficient to repair.  The repair would not
be completed until well after the non-renewal takes effect.   It is
likely that the repair will not have *started* until after the
non-renewal takes effect.

>What may happen is that your loan company will get fire insurance
>to protect their loan.  It will be very expensive to you and will
>not cover much.
I think that it is likely that the lender will attempt to impose such
a policy to protect their interest.  I'm concerned that no insurer
will cover a
property in this condition and that the lender will then call the loan.

QUOTE:

I am concerned that my lender will call my loan once the property is uninsured.
I would like to know what the process will be if they do call the loan.

UNQUOTE

Would your lender know that you were uninsured?

Were you required to report the fire damage to your lender? And did you?

They are not, more than likely, going to call a loan on a house that
is damaged. Is it safe to assume that your current insurance comp is
going to repair the damage?

What may happen is that your loan company will get fire insurance to
protect their loan.  It will be very expensive to you and will not
cover much.