![]() ![]() In other words, your property and the house are the collateral for the loan so if you cashed the insurance checks but did not rebuild, then the mortgage company would have a problem. Your mortgage documents are set up to protect the mortgage company if you take your insurance rebuild money and disappear. When you borrowed money to buy your home, you agreed that one way the mortgage company would be protected would be that the mortgage company would be co-insured, right along with you, for any harm to your “improvements.” Q: Why can’t I just deposit and use my insurance checks? Why does it have to go through my mortgage company first when I paid the insurance premiums? “Improvements” include your house, gazebo, patio, fence, and driveway. “Improvements” are pretty much everything on the land that is not organic (dirt, grass, trees, bushes). Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss.” You may not live in California-so read your specific documents carefully! IMPORTANT NOTE: The information provided below assumes that the reader has standard California mortgage documents. You will also find out how to get paid interest on proceed funds while they are being held by your lender. We will also provide information on how get your lender to release insurance proceeds when proceeds are greater than the amount you owe on your loan. The goal of this tip sheet is to give you strategies to get control of the insurance money as soon as possible. This means that before you can begin to rebuild, you must first understand the process of how to get your mortgage lender to let go of your insurance proceeds ( see sample letter from a lender to homeowner). Until your mortgage company releases its claim on some or all of the funds, they will sit in your mortgage company’s account. This happens because your lender has a financial interest in the property that your insurer will honor/protect. If you have a mortgage, and your home has suffered severe damage or been destroyed, some or all of the payment checks from your insurance company will be made payable jointly to BOTH you and your mortgage company. ![]()
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