Ask Regina

Q. We have an insured whose house has been foreclosed and the mortgage company has requested policy cancellation and the returned premium. Can they do this?

A. Yes, in the event of a foreclosure under a deed of trust, the lender may cancel an reginainsurance policy covering the foreclosed property and is entitled to any unearned premiums from the policy if the lender:

  1. credits the amount of the unearned premiums against any deficiency owed by the borrower; and
  2. delivers to the borrower any excess unearned premiums not credited against a deficiency
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