Homeowner’s Insurance: The Settlement Check Process

Homeowners have discovered that mortgage companies have a great deal of power over their insurance settlement money.

Because the mortgage company can refuse to release funds and leave home repair plans up in the air, it is important to understand the mortgage check process for homeowner’s insurance settlement claims.

When you take out a mortgage, your mortgage company essentially owns a stake in your property, giving the lender the right to determine how and when to release your check to repair the property.

However, lenders must follow certain policies and procedures or they may be subject to a homeowners insurance claim lawsuit.

Endorsing Your Homeowner’s Claim Check

Getting your mortgage company to endorse your homeowner’s insurance claim check can take quite a while. Both your mortgage company and the entities that back your loan have power over the endorsement.

They can choose when they will endorse your check, or choose to hold the funds and release part of them to you or your contractor to start the repair work.

Mortgage companies maintain this kind of power over repair funds because they have an interest in making sure the money is used for legitimate repairs.

Some unscrupulous homeowners may submit fraudulent claims, or submit legitimate claims but use the repair money for other purposes.

Current Loans Less than 15k

For loans that are current and repairs that are below a certain amount (usually $10,000 to $15,000), homeowners can generally get their checks endorsed without too much trouble.

If there is a local branch for the mortgage company, homeowners can often simply go to the branch for the endorsement. Many companies will require the homeowner to provide a copy of the adjustor’s report and the repair contract, showing that the check will be used for legitimate repairs.

If there are no local branches, homeowners will need to mail the check and the adjustor’s report to the mortgage company.

Checks Over 15K Are More Difficult to Get Endorsed

Mortgage companies will often want to monitor repairs that will cost over $15,000. The companies may also choose to distribute portions of the repair funds periodically throughout the repair process, rather than all at once.

A typical schedule is 1/3 of the funds at the beginning of the repair, 1/3 halfway through the repair process, and 1/3 after the work is done.

If the 1/3 initial payment isn’t satisfactory for the contractor, the lender may be able to grant an exception. If the lender is unwilling to make an exception, however, the homeowner may have a very hard time getting the necessary repairs started.

Homeowner’s Insurance Lawsuits

Though there are policies and procedures in place to protect both homeowners and mortgage lenders, some homeowners have reported that their mortgage companies refuse to release the repair funds, putting a hold on necessary repairs and rebuilding.

Other homeowners have ultimately been able get the money owed by their policy, but have encountered unnecessary difficulties in collecting their funds. These homeowners report spending hours on the phone with various mortgage company employees, with little success.

If you have suffered from homeowner’s insurance violations, facing a company’s refusal or unwillingness to access money, you may be able to take legal action in a homeowner’s insurance lawsuit against your mortgage company.

Join a Free Insurance Property Claim Class Action Lawsuit Investigation

If you have experienced difficulty recovering insurance property claim money from your mortgage company, you may have a legal claim. Submit your information now for a free case evaluation. If you qualify, a lawyer will contact you to discuss the details of your case.

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