The mortgage company is holding my insurance check.

The mortgage company is holding my insurance check.

Why they are on it. Your mortgage requires you to insure the property and names the lender as mortgagee under the standard mortgage clause. They hold a security interest in the building, and insurance proceeds for damage to the building are proceeds of their collateral. That is why the check is joint. It is not a mistake, it is not personal, and it is in the mortgage you signed.

What they can do. Require your endorsement. Hold the funds. Disburse in draws tied to inspections. Require documentation before releasing anything. Many mortgages also permit the servicer to apply proceeds to the loan balance if their security is impaired or you are in default, which is why anyone behind on payments needs to read that section carefully before assuming the money is coming to them.

What they generally cannot do. Sit on it indefinitely with no stated process. Servicers operate under investor guidelines from Fannie Mae, Freddie Mac, FHA, or VA depending on the loan, and those guidelines set expectations including a threshold below which many servicers release funds without any draw process at all. That threshold exists and is often surprisingly high. Ask for it by name.

How you get money moving. Send one complete package instead of three partial ones, because every incomplete submission restarts their clock. What they almost always want: the adjuster's report or estimate, a signed contract with your contractor including scope and price, the contractor's W-9, license, and certificate of insurance, and the servicer's own signed draw authorization form.

If it stalls after a complete submission, the escalation that actually works is a complaint to the Consumer Financial Protection Bureau. Servicers respond to those on a timeline, in writing, and it costs you nothing.

What nobody tells you. Many servicers offer alternatives to a scheduled physical inspection, including photo-based or self-certification options, particularly for smaller draws. These exist. They are not advertised. Ask specifically whether a photo inspection or borrower self-certification is available for this draw.

And the thing to fix on the contractor side, which is really the root of it. The payment schedule in your contract has to match the lender's draw schedule. A contractor who expects thirds on his own timeline, and a servicer who releases thirds on theirs, will collide every time. If the contract is not yet signed, align them. If it is signed, get the contractor and the servicer's requirements in front of each other now rather than at the third draw.

— Eli Goins, Florida licensed public adjuster #P159790. Ocean Point Claims Company (FL DFS #W829547).

Mortgage companies are typically co-payees on property insurance checks. They hold funds and disburse them as repairs progress to protect their collateral.

You are entitled to reasonable disbursement. The mortgage company cannot indefinitely hold funds. Federal regulations and the deed of trust govern disbursement schedules.