Can a mortgage company keep an insurance claim ifthe homeowner decides not to do some repairs?

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Can a mortgage company keep an insurance claim ifthe homeowner decides not to do some repairs?

Asked on January 11, 2011 under Real Estate Law, Nebraska

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Am I understanding that you put in an insurance claim in for work tobe done on your home and that you were paid but decided not to do the work and instead keep the money?  And the check was written to you and the mortgage company and they kept the money?  The mortgage company has a vested interest in your home being repaired and insuring its maintenance.  But if the check was written in your name only they could not cash it.  I would take a look at your policy and then I would ask the mortgage company on what authority they are standing to keep the money.  I am assuming that they kept it with the intent to have the home repaired, correct?  Otherwise they would be doing the same thing you are, which is really not legitimate.  Good luck.


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