is my mortgage company suppose to deposit the check for my repairs when there is an attorney involved?
UPDATED: Feb 28, 2018
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Asked February 28, 2018
A home insurance coverage provider typically cuts a check to both the homeowner and lender after a covered incident occurs that involves a mortgaged property. The reason is simple: The lender has invested in the property. Since a homeowner might endorse an insurance check and not perform necessary repairs as promised, it's actually quite normal for a lender to deposit the check in a restricted escrow account unless a different arrangement exists. This action guarantees that the homeowner will use the insurance money to perform repairs to the property.
Not all lenders handle insurance claims this way. Some lenders allow borrowers to cash checks for claims that involve small repair projects. You should contact your mortgage company to find out their exact process. If your lender has deposited the money, then you should make arrangements to acquire the funds as needed for repairs.
You don't specify why there is an attorney involved in your specific situation. Is the attorney handling a case against your lender or a case related to the cause of property damage? Either way, you should still be able to get the money even after you've endorsed the check and the mortgage company has deposited it into an account that it controls. Most lenders provide borrowers with the money that they need to pay one or more contractors at the end of the construction period or as installment payments. You should speak with the lender and contractors to hammer out payment details.
It's important to note that your lender might tell you that they can't approve any payment or payments until they have physical proof that you have restored the property to its original state. Your lender might also attempt to use an insurance claim check to pay down your mortgage balance if you lost your home entirely or a severe account delinquency exists. In those types of cases, you should speak with a lawyer who specializes in mortgage-related law about your rights.
Answered March 1, 2018 by InsuranceStar