By Eli Goins · FL DFS #P159790 · Reviewed: · 1 min read
Short answer: Your mortgage company appears on the check because it has a contractual and statutory interest in the property it financed. Large insurance checks are made jointly payable to you and the mortgagee as a loan condition, so the proceeds actually go toward repairs. The mortgagee deposits the funds into escrow and releases draws as repair milestones are met.
Why this exists
The mortgagee financed the house. If a loss occurs, they want to ensure the proceeds actually go to repair, not pocketed by the borrower.
How release works
- Endorse the check
- Send to mortgagee
- Mortgagee deposits into escrow
- Inspector visits at milestones (30%, 60%, 100%) and releases draws
When the mortgagee blocks release
- Loan is past due
- Property is in foreclosure
- Repairs are not progressing
Tips to keep it moving
- Notify mortgagee in writing when claim is filed
- Use a licensed contractor with lien-waiver discipline
- Stay current on the mortgage