Legal Question in Real Estate Law in California

mortgage

does a mortgage company have the right to not disburse your insurance money for repairs of your home if you are behind in the mortgage payment? The loss-draft department of the mortgage company delayed disbursing my 1st draft and 2nd draft by 1 month each, causing me to delay in reopening my business I operate out of my home. now I am behind 1 month in my mortgage payment and they will not release the last draft until the payment is current. this prevents me from finishing my home and paying my contractor.


Asked on 8/21/08, 8:09 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: mortgage

As I said in response to an earlier version of this question, the answer is probably, but not necessarily, yes. Their right would be contractual in nature. The questions or issues are whether the lender is the loss payee, whether the type of insurance is one the borrower was required to carry, and whether the loan agreement allows this kind of retention in order to protect its security interest in the property.

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Answered on 8/21/08, 9:34 pm


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