Legal Question in Real Estate Law in California
i have a insurance claim check for soot damage to my home from a fire. the insurance company made the check out to myself and the mortgage company. im short selling this same property and close on it today. what should I do? does the bank have any right to this money after I close on the house and its sold? I just want them to sign it and return it to me. this was for damage to my belongings in the house.
2 Answers from Attorneys
I'd imagine you'll need to negotiate a deal with the mortgage company. The two-payee check is standard with payments of insurance proceeds on mortgaged property - your deed of trust (and/or note) probably contains both an assignment of rents and an assignment of insurance proceeds.
It depends on whether having fire insurance was a term of your deed of trust, and how that clause is worded. The typical form of deed of trust provides that wen ther e is a fire, the insurance proceeds must be paid to the beneficiary (lender) to be applied toward payment of the secured indebtedness.
The second issue is whether the structure itself was damaged, and is reflected in the insurance payment, or only personal, removable property.
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