Why Is Your Mortgage Company's Name on Your Roof Insurance Check?

Here is the question: “Why is my mortgage company’s name on my insurance check, and how do I get it cashed?”

It catches people off guard. The claim is approved, the check arrives, and there is a second name on it. Now you are not sure you can use the money to fix your roof.

You can. It takes a few extra steps, and it goes smoother when you start early. Here is how it works.

Why is your mortgage company on the check?

Your mortgage company is on the check because your home is the collateral for your loan. If the house is damaged, the lender’s collateral is damaged too.

When you took out the mortgage, you agreed to keep the home insured. Your policy lists the lender in what is called the mortgage clause. Under a standard homeowners policy, a payment for damage to the house is paid to both you and the lender.

So the second name is not a mistake, and it is not a sign of a problem with your claim. It is the usual way a claim on a mortgaged home is paid.

If you own your home outright, the check comes to you alone.

Can you deposit the check without your mortgage company?

No. A check made out to two parties needs both signatures. Your bank will not accept it with only yours.

The good news is that lenders handle this every day. Most have a department just for it. It is often called the insurance claims department, the loss draft department, or property loss.

Do not sign the check and mail it off until you have talked to that department. Each lender wants it handled a certain way.

What do you do with the check, step by step?

1. Find the right phone number. Look on your mortgage statement or your lender’s website for insurance claims or loss drafts. The regular customer service line will usually transfer you.
2. Tell them you have a claim check and you plan to repair the roof. Ask what they need from you and how the money will be released.
3. Get the list in writing. Ask them to email or mail the instructions and any forms.
4. Gather the documents. See the list below.
5. Sign the check the way they tell you to. Some lenders want you to sign first and mail it. Some want it unsigned. Make a copy of the front and back before it leaves your hands.
6. Send it with tracking. Use a method that gives you a tracking number. Some lenders let you upload documents and take the check to a branch.
7. Keep a log. Write down who you spoke with, the date, and what they said.

What will your mortgage company ask for?

Most lenders ask for two things, plus their own forms.

• The insurance company’s estimate. This is the multi-page document your insurance company sent with the claim. Some lenders call it the adjuster’s report.
• A signed contract or estimate from your roofer. The lender wants to see who is doing the work and for how much.
• The lender’s own forms. Many have a form where you state that you intend to repair the home.

Some lenders also ask the contractor for paperwork directly. The list is different at every lender, so go by what yours sends you.

This is one of the real reasons a homeowner needs a document from their roofer, even when insurance already wrote an estimate. We cover that in insurance estimate vs. contractor estimate.

Will you get the money all at once?

It depends on four things: your lender, who owns your loan, whether your payments are current, and the size of the claim.

There are two common outcomes:

• The lender signs the check and sends it back. This is more common on smaller claims.
• The lender deposits the check and releases the money. It may come in one payment or in stages as the work gets done. Some lenders inspect the work before a later payment.

Here is one published example. Many home loans are owned by Fannie Mae, and its servicing guide sets rules for the companies that collect those payments. For a loan that is current, the guide lets the servicer release a first payment of up to $40,000 or more, with any remaining money released as repairs progress. It also requires money that has not been released to be held in an interest-bearing account for the borrower. (Fannie Mae Servicing Guide, B-5-01, dated 07/12/2023.)

Many asphalt shingle roof claims are under that amount. But that guide only applies to loans Fannie Mae owns, and your lender may have its own rules. Ask yours.

Is the mortgage company on every check?

Often, yes. A roof claim usually pays in two parts. The first payment comes after the claim is approved. The second comes after the work is done, when your insurance company releases the recoverable depreciation.

Either check, or both, may name your lender. Ask your insurance company how each one will be made out. That way the second check does not surprise you at the end of the job.

If the two-payment setup is new to you, see how to read a roof insurance estimate.

How does this affect your roofer and your schedule?

It can add time between the check arriving and the money being ready. That matters for scheduling and for when payments are due.

Three things help:

• Call your lender the day the check arrives. Do not wait until the roof is on the calendar.
• Tell your roofer you have a mortgage. Ask how their payment schedule works if the lender releases money in stages. Ours is explained below.
• Remember your deductible. It is still yours to pay, apart from anything the lender releases.

What mistakes should you avoid?

• Letting the check sit. Many insurance checks print a “void after” date. Look at yours.
• Mailing the only copy. Copy the check and every form before you send them.
• Guessing at the process. Lenders differ. A ten-minute call saves weeks.
• Signing a contract without telling your roofer about the mortgage. The payment timeline should match how the money will actually arrive.

How does Homer Roofing help with this step?

We have worked with Utah homeowners on storm claims since 2003. When your lender asks for a contractor document, we provide a written scope of work bid for your roof. If the lender needs something from the contractor directly, we send what they ask for.

We also explain where this step fits in the whole claim. Our guide on how the roof insurance claim process works in Utah walks through it from the first inspection to the last payment.

Your lender decides how and when it releases the money. We cannot speed that up, and we will not tell you otherwise.

How does payment work with Homer Roofing on a claim?

You do not need the full claim amount in hand to get on our schedule. We can accept either your deductible or your first insurance payment (the ACV payment) to schedule your roof and order the permit from your city.

Once the roof is complete, we take care of two things:

• Supplements. If the job turned up items the insurance estimate does not list, we put together the documentation. Depending on your insurance company, we send it or you do. Your insurance company decides whether to approve it.
• A Certificate of Completion. You and Homer Roofing both sign it. It states that the work is finished, and it goes to your insurance company with the final invoice.

That paperwork is what your insurance company uses to release your final payment, which is the recoverable depreciation. Most of the time, any approved supplement is included with that last check.

If your lender is named on the last check too, it goes through the same signing steps as the first one.

Key Takeaways

• Your lender is on the check because your home secures the loan. It is normal.
• You cannot deposit the check alone. Both parties have to sign.
• Call your lender’s insurance claims or loss draft department first.
• Expect to send the insurance estimate and a signed contract or estimate from your roofer.
• The money may come in one payment or in stages. It depends on your lender and your loan.
• The depreciation check may name your lender too.
• Start the day the check arrives, and tell your roofer you have a mortgage.

FAQ

Why is my mortgage company’s name on my insurance check?

Your mortgage company is named on the check because your homeowners policy lists it as a party with a financial interest in the home. Standard policies pay a loss on the house to both you and the lender. The lender wants to see the money go toward repairing the property that secures the loan.

Can I deposit an insurance check that has my mortgage company’s name on it?

Not by yourself. A check made out to more than one party needs every party’s signature before a bank will accept it. Call your mortgage company’s insurance claims department and ask how they want the check signed and sent.

How long does a mortgage company take to release insurance money?

It depends on your lender, who owns your loan, whether your payments are current, and the size of the claim. Some lenders sign the check and send it back. Others deposit it and release the money in stages. Ask your lender for the timeline in writing before your roof is scheduled.

What documents does a mortgage company ask for on a roof claim?

Most lenders ask for the insurance company’s estimate and a signed contract or estimate from your roofer. Many also have their own forms for you to sign. The list varies by lender, so ask for it in writing on your first call.

Will my mortgage company keep my insurance money to pay down my loan?

The usual purpose of the process is to make sure the home gets repaired, not to pay down the loan. If you intend to repair the roof, tell your lender that on the first call and ask how the funds will be released. If you have concerns about how your lender is handling the money, a HUD-approved housing counselor can help.

Is the mortgage company’s name on the depreciation check too?

It can be. The first payment and the later payment for recoverable depreciation may both name your lender. Ask your insurance company how each check will be made out so you can plan for the extra step.

This article is general education. It is not legal or financial advice, and it does not review your insurance policy or your loan. Your insurance company, your policy, and your lender decide how payments are made.