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I have been told that if I take a cash settlement (on the claim that I have open for a minor fire in my house, because the cheque is (just) over $10,000 I have to get my mortgage company to approve the cheque prior to being able to deposit it in to the bank.... Is this true?
I was also told that the mortgage company could decide to hold all or a portion of the cheque until I can prove that the repairs have been completed..... Is this true?
And if so, how on earth are we to get the repairs completed without the money from the settlement???
Thanks to anyone who can shed some light on this for me!
Posted by Matt77 on 2011/06/28 19:25:18
This is less of an insurance question and more of a question for your lawyer who helped you to close your home along with your mortgage company. The only thing I can add in my opinion as an insurance broker, and not as lawyer, is that your mortgage company may have a clause in your mortgage contract stating that they must approve any funds given to you by your insurance company over a certain limit. The reason for this is that they own the house as well as you; so they have a financial interest just like you. Your mortgage company placed a lien on your home and have rights to recover any money from an insurance loss just as you do. Nevertheless, this is a discussion you should have with your lawyer to verify how this transaction would work with your mortgage company.
Sean Graham, Principal Broker at KTX Insurance Brokers
Posted by SeanGraham on 2011/06/29 11:52:27
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