QUESTION
Can a mortgage company withhold insurance check funds due tho the builder because of an overdue mortgage payment?
Asked on May 05th, 2012 on Residential Real Estate - New York
More details to this question:
We recently had a house fire and the insurance company cut us a check for the agreed amy. and we forwarded it to our mortgage company, as they are supposed to disperse the funds to the builder as he submits his invoices. We have been told by the insurance company that they cannot disperse funds because our mortgage payment is late. Can they legally do this?
1 ANSWER
1 Award
Yes they can. It is called a setoff, and it is allowed. At this point you need to determine how valuable the house is with the damage. In light of the mortgage arrears, you need to consider options, like selling, bankruptcy or something to get back on track.
Answered on May 06th, 2012 at 8:05 AM