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