Each mortgage company has its own rules when it comes to processing your insurance claim check or settlement through their loss draft department. Read on and you will learn How to Get Your Mortgage Company to Send the Full Insurance Settlement Back.
Once set up your claim with the loss draft department at your mortgage company and you send your settlement check to the mortgage company, you will now have to hope they send you the funds back, so you can start the repairs on your house. The general rule regarding whether you will get the funds back right away or not is determined by the size of the settlement check. Many mortgage companies have a $40,000 threshold, so if you send a check that is $40,000 or greater to your mortgage company loss draft department, they will likely hold that settlement check and want to do an inspection of your property to make sure the work is underway. Again, this is because the mortgage company has an interest or lien in your property and wants to make sure you don’t use the settlement proceeds to buy a cruise to the Caribbean. Each mortgage company has its own rules when it comes to processing your insurance claim check or settlement through their loss draft department. Read on and you will learn How to Get Your Mortgage Company to Send the Full Insurance Settlement Back.
Aside From the Monetary Threshold, Why Else Would the Bank Hold My Money?
We have seen that sometimes the mortgage company will hold your “UNDER” threshold settlement and do what is called a “monitored claim” if for some reason you are not in good standing with your mortgage company. In other words, if you are in default, or pre-foreclosure or foreclosure, or possibly even if you are on forbearance of some sort, the mortgage company can hold your money and distribute it back to you on what they call a “supervised status.” They will typically send you 1/3 of your check so the contractors can purchase materials. Once the job is half completed, the mortgage company will release some more money. and when the job is complete, the repairing funds will be sent to pay the contractor. If there are any funds left over that the mortgage company is holing, they will release that amount to you, and you can keep it. We have seen many times that if you shop around, you can often times find a good contractor who will do the job for less money, and that means more money in your pocket in the end, to do some other repairs that you would like to deal with.
Why do Mortgage Companies Make it so Difficult to get Your Settlement Money Back?
This is the main reason: THEY own your house “technically” until you pay off your mortgage. As long as you have $1 dollar left to pay, and you don’t pay it, the mortgage company/bank, could start foreclosure and take the house from you. Because of that, if you get a settlement…let’s say $100,000, and you stop making payments and use the money for something else, when the bank takes over your house, they will wind up getting a house that is need of $100,000 of repairs. So, now they have to rehab the house which costs money, and then sell it. They don’t want that headache.
We Always Get Questions About This. We Can Help.
We always get questions about the settlement checks. The most often asked question is, “How can I get around this issue where the bank controls the money.
Settlement Claim Check Trick
There is a trick, but not everyone can do it. Here it is: Quickly pay off the balance of your Mortgage. We realize that this is easier said than done, especially if you just started paying and the payoff balance is very high. But, we have come across clients who are nearly paid up on their mortgage, or the balance that is remaining is an amount the client has sitting in the bank. If you are lucky enough to have that money sitting around, we recommend paying off your mortgage, so the mortgage company will drop the lien on your home. Call us, FAPA, for any questions about this. We should be able to assist and answer questions. FAPA-Florida Allstar Public Adjusting, Inc. 954-659-8333.