"If the borrower [in default] is still living in the home and is making progress toward repayment and the investor is OK with it, we will release the insurance benefits so repairs can begin," says Northagen."If the borrower is severely delinquent, we handle the situation on a case-by-case basis. We try to work with our customers, but ultimately, if the borrower is not cooperating and not returning messages or is no longer living in the home, the servicer may ask to have the insurance proceeds applied to the loan balance. However, this happens in a relatively small number of cases."
Can Mortgage Lenders Hold Your Insurance Money Hostage?
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
More than 30 investing pros with skin in the game give you actionable insight and investment ideas.