I have an insurance settlement that is being held in an escrow account by our mortgage company. The needed repair work has been done and the house is being sold. Once the house mortgage has been paid off am I correct in thinking that the remaining $ in the escrow will be released to me as the mortgage company no longer has an interest in the home? The insurance company that settled is no longer insuring the house. Thanks.
Mr. Malone, thank you for reaching out. It’s unfortunate your mortgage company did not explain the process to you as they should have released the money to you once the repairs and an inspection were completed. Depending on the amount of damages, the mortgage companies typically require an inspection at these 3 stages: 30% complete, 75% complete, and 100% completion. They rely on the homeowner to call and advise they are ready for the inspections, and then the mortgage company will have a 3rd party person/inspector schedule the inspection. This ‘inspector’ comes to your home and will take photos of work completed, and of remaining work to be done. After the inspection is complete, the ‘inspector’ writes a report and sends the photos to the lender to verify work is being completed, and the mortgage company then releases partial payment. Since it appears from your question this has not been done, there are two scenarios:
One, if you already have a closing date, it is most likely the mortgage company will apply the insurance proceeds towards the payoff of your loan.
Two, if you have time prior to closing, you may want to call your mortgage company and let them know the repairs to your home are complete. Again, depending on the severity of the damages and the dollar amount, they may allow you to take photos and submit to them for release of your insurance monies. This is assuming that all repairs were completed that your insurance carrier included in their estimate.
Best of luck with your move!