Mortgage company checks: how repair funds get released

If you have a mortgage, your lender is usually named on the insurance check. The lender has a financial interest in the home, so it often holds the money and releases it in stages as repairs are done. Knowing the steps can save weeks.

How it usually works

1. The check arrives made out to you and your mortgage company, and sometimes your contractor too.
2. Call your lender's loss draft (or insurance claims) department. Ask for its instructions, required forms and mailing or upload address.
3. Endorse and send the check as the lender instructs. Some lenders use an online portal for documents and updates.
4. Send the required documents. These commonly include:
5. The lender releases funds. Depending on the amount and whether your loan is current, it may release everything at once, or an initial amount with the rest held in a restricted account.
6. Draws and inspections. For held funds, the lender releases more as work progresses. It may require an inspection, progress photos or lien waivers before each draw.
7. Final release. After a final inspection or proof of completion, the lender releases the remaining balance.

• • the carrier's estimate or settlement letter
  • a signed contract with your contractor
  • the contractor's license, insurance certificate and W-9
  • a signed lender form or affidavit

Tips to avoid delays

• Ask the lender for a complete checklist at the start, in writing.
• Send everything at once, and keep copies with the date sent.
• Write down the name of each person you speak with and any reference number.
• Follow up every week until funds are released.
• Tell your contractor what the lender needs; they often have to supply part of it.

Our team helps contractors track lender requirements and paperwork so repair funds aren't held up.

This article is general information, not legal advice. Your policy and your situation control. For questions about your rights, talk to a licensed attorney.