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Mortgage Company Involvement with Your Claim

When you experience damage to your home, filing a claim and dealing with all that this entails can be both confusing and frustrating. While you know you must deal with the insurance company, you may not realize that your mortgage company also plays a role in the claim process.

When you receive the news that your home damage is covered by your insurance policy, you are most likely relieved. However, you may not be aware that your check needs to be signed by your mortgage company before it is cashed.  In fact, the mortgage company is likely to want to cash the check and dole out the money to you and your contractor in pieces over the length of the project and then only after a lot of red tape. You might be wondering why your mortgage lender is involved with your insurance money?


When you have a mortgage on your home, it’s very likely that your mortgage lender will play a role in the claims process. Why? Because when lenders approve you for a mortgage, usually they will require that they are included as a covered entity in any insurance payments made related to the home’s structure for an insurance loss.  Your lender is named as the “loss payee” on your insurance policy as well as yourself. A loss payee is defined as the person or company to whom an insurance company is required to make a payment should an insured event occur. Therefore, when you receive your check from your insurance company for the repairs the check will be made out to as many as three parties, you, your contractor, and your mortgage company.

Your mortgage company has an investment in your home. They want to be sure your property is repaired and restored to its value. This means most of the time, they may not release all the funds immediately. They may keep close watch over the repairs and release funds in increments. Furthermore, your mortgage company will not want to process any payment until an agreement on the scope of work and the dollar amount for that work has been reached with the insurance adjuster.

After that point, the amount of red tape involved with processing the insurance payment with your mortgage company can be very high. The best thing you can do is to hire a restoration company such as ServiceMaster Quality Restoration. We have experience in dealing with mortgage companies during the claim process and our in house mortgage expert will coordinate with the mortgage company for you. Because we handle so many mortgage-related claims we know all the ins and outs of the process and a few tricks that can make the process go more smoothly.

We offer to do the work on your behalf, free of charge, and as a service to you the customer. Give us a call, we can walk you through the process. We are here for you.