Legal Question in Real Estate Law in Georgia
my home is in foreclouser and on 3-11 we had some tornado damage insurance sent bank of amercia a ck for over 41,0000 first they said they would apply it to my loan and let us do the work and now they say no is there any way i can make them apply this to my loan this would take me out of foreclosuser
2 Answers from Attorneys
You can ask the bank but they do not have to agree.
You have an obligation to make payments on the loan. If there is damage to the property, the bank's collateral is worth less. That money is used to repair the property or reimburse the bank for the decrease in value of the collateral. There is no benefit to the bank to apply it to your loan (that you are not paying), only to have collateral that is worth less. They expect, and are entitled to, the full value of their collateral AND payments as agreed to under the loan documents. You only want to give them one of those.
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