Can the mortgage company use the check(s) from insurance company, since they are co-recipients, to pay off my mortgage thereby forcing me to get a new loan at a much higher percent?
Rod Taylor asked 2 weeks ago 1 Answers
Hi Rob, the short answer is no, the mortgage company cannot pay off your outstanding mortgage with an insurance settlement check.
The lienholder/mortgage company is listed on the insurance settlement check because they have a financial interest in the property. If you would like to have future insurance checks issued without the lienholder, then you can consider paying off your outstanding mortgage balance; you would then own the property outright and your carrier would/should issue future settlement checks to you alone without the lienholder on the check. However, this can be a complex decision depending on your loan interest rate, balance, and what you plan to do (rebuild or buy another home). We would suggest that you speak with your financial advisor on the matter.
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