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Home >> Lending >> Home Mortgage
Problem with Mortgage Check
I have an insurance claim check made payable to me and my mortgage company. I am afraid that when I send it to my mortgage company for endorsement they will try to apply it to a past due balance that I have. I am on a repayment plan with them, so is there any way I can keep them from holding the check and just endorsing it and sending it back to me? Someone told me to endorse the check and and write 'for deposit only' with my bank name and account number and that would prevent them from being able to hold the check and they would have to endose it and mail it back to me.
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 The intent of the jointly payable check is to ensure that each party, you and the lienholder, benefits from the proceeds. If the check is for necessary repairs, the work has to be done and paid for.
You need to speak with your lender and make proper arrangements so that the work gets done and paid for. If there is work done and it is not paid for, you could find another lien on your home. If you deposit the check without the correct endorsement of your lender, you will have problems. What will happen is they will tell the insurance company that they didn't endorse it. Your insurance company will undo the payment and your bank will take the money back out of your account. That means that you will suddenly have a large payment to make to them, or you could face criminal charges.
If the repairs can be done for less than the value of the check, there is nothing wrong with having the excess paid against your past due loan. The bottom line is, if you hope to pocket this money, you shouldn't. That is not what it is for.
Published on BankingQuestions.com 12/09/08
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