Mortgage Property Insurance Coverage Act
December 8th, 2008 | 
Author: Most people are not aware of the recently enacted Pennsylvania Law that benefits Homeowners by placing a “Cap” on the amount of property insurance that a mortgage lender can require.
The new law prohibits all mortgage lenders from requiring borrowers to obtain property insurance coverage on owner-occupied private residential property that exceeds the replacement value of the buildings on the land securing the loan. It also prohibits all mortgage lenders from requiring borrowers to insure the value of the land. The law is known as the Mortgage Property Insurance Coverage Act, PA Act 2008-51, and became effective on July 4, 2008.
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Pennsylvania law offices seem to actually work, goodjob for them.
I hope that law will be enforceable.
Now that the housing market went into the toilet, has anyone thought of the NEGATIVE aspects this has? If your home was worth say $230,000, and you have a mortgage for that amount, now 2 years later your home has decreased in value, and the replacement cost is now $160,000 that is all the lender will get should the house be a loss. Who is going to eat the $70,000? That is not right!
Thanks for the detailed information about real estate, This is really helpful post.
Thanks again !!
I think insurance is imprescindible to anyone disposed to active a distract withdraw time. But today´s rates are virtuous too lyceum!
What if the liens against the property exceed the replacement cost? Or will the amount of the mortgage now be based on the house only, without the land value?