Why can’t I apply my fire insurance check to my mortgage?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Why can’t I apply my fire insurance check to my mortgage?

My lender is holding onto a fire insurance check for $235,00 that I would like to apply to the mortgage so i can sell the property as is and start fresh. I still owe $280,000 on the mortgage and my land is worth $60,000. It’s been over 1 1/2 years. Every time I call them I get the run around now they are saying that they will not apply the insurance check until the mortgage is paid in full. I have been living with relatives and would like to start my life over.

Asked on August 2, 2012 under Real Estate Law, New Hampshire

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The reason why you probably cannot apply your insurance settlement check to your unpaid mortgage is that the mortgage probably has a provision within it stating that the security for the loan if damaged and there is an insurance pay out must be repaired with insurance funds.

As such, I suggest that you carefully read your mortgage (trust deed) on the issue you are writing about. Most likely your answer will be there.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption