The house is sold so the current home owner have to carry the house insurance cover the content as well as the building. You own the land so you should buy insurance to cover the area of your land incase someone got hurt on your land. You don't have to buy the building hazard insurance. However, the mortgage company will tell exactly what should be done or the will want their money back.
You need to speak with an attorney as it sounds like you entered into an illegal contract by selling some thing that you do not clearly own. The lender will not allow an assumption of the loan or accept their insurance as coverage for the collateral. Land Contracts are a bad idea as both parties generally lose. Good Luck
Your contract states you must carry the homeowner's insurance. Sounds like you don't have that. YOU are in breach. The fact that your state doesn't allow you to carry such insurance is not relevant.
You do need to talk to a real estate attorney that is very familiar with real estate law in your area and has a chance to look at your "land Contract" and your original loan documents. It could be that the contract was written incorrectly by an honest mistake or it could be that the insurance policy was written incorrectly by an honest mistake or if could be that there is bank fraud going on here. It could also be that you have committed bank fraud without realizing it. Talk with that attorney and follow their advice.
My husband and I sold our home on land contract last year. Things have gone wrong since the beginning. Well now we are wanting out really bad because the realtor and the buyers are trying to cut us out. In out contact it states they are to carry renters insurance due to the kind of loan we have and we were to carry the home owners. Well in my state if you don't live in the home you can't have homeowners insurance. So we have the insurance we are allowed by law. Well the buyers are fighting us on this and want us to send over there homeowners to the loan company. Well when they sent it over to us they listed the realitor as the insurable interest on it and never named us. I know for a fact this was done on purpose do to other things that have happen. What I'm asking is what can we do about this. We told them what the contract says and what the mortgage company says and they just keep fighting with us. Our realitor/ manegment company has turned on us too. Hoping to talk to a lawer on Monday.
