Mortgage People!!!:Restricted Escrow Account Question

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1

This could be a dumb question or not…
I’m currently refinancing and during th refiancing process my garage was damaged during the wind storm that we had last week. So I called my insurance company. They came out looked it over and agreed that the wind storm did severe damage to it. Made it lean about 6in off center.

Anyways. I’m at the processor stage of my refiancing basically before closing.

The insurance company wrote out a check to me and citimortgage. So citimortgage has to endorse the check, I called and asked where I should send the check to and founf out that this is like a 4 to 5 week process in which, I have to endorse the check and the will endorse the check and they will spply me with the contractor.
They will basically cash the check and put it into a restricted escrow account in which strict guidelines are to be followed. They will do disbursment of like 25% when a certain thing is done another 25% is disbursed.

So anyways the qquestion is I don’t like this idea and I would get mor bang for my buck if I brought a garage kit and contract just the labor.
So let say I do sign the check and send it to them to hold in restricted escrow.
And my current bank pays the loan off in full would I get that money back?

Or

Should I just hold on to the check and wait until my closing is done and send it in for them to endorse after the loan has been paid in full? So they can just endorse it and I can get all the amount back?

2

I wouldn’t have let them pick a contractor. Call them back and tell them what you want to do. What they want to do is pay the contractor directly in steps to ensure that the work is done, and properly done to protect their investment.

3

citimortgage is the worst bank i have ever dealt with. i wouldnt want them to do anything for me anymore.

I called and they dont understand what im trying to explain to them they gave me like 17 pages of paperwork to fill out just so i can get the process
started…

they are about to lose the investment once i close my loan and funds are disbursed to the citimortgage to pay off the loan in full.

So the question is still can i just hold the check until my mortgage i paid in full and then tell them, i had a existing mortgage but its already been paid off in full, i just recieved a insurance check payable to citimortgage and myself. Can you please endorse so i can cash it to do my garage?

4

I work at wamu/Chase, and here if you write a letter stating you are doing the repairs and you are your own contractor they will send you all the money. So that may be an option

If you pay the loan in full they will release funds because they no longer hold an interest in the loan.

A restricted escrow is to prohibit people from cashing an insurance check and leaving the house in disrepair, then the bank owns a broken house.

Most banks dont care who you hire, as long as its a legit contractor. they should ask for their w9, copy of estimate, and copy of the contract.

5

thanks travisn,
So either way i would be ok if i were to send them the check now or even wait until my refinaning closes and ask them to endorse the check?

6

you are in kind of a sticky situation. I am not sure if your ins co will want to have the new company on the check. but I do know when you refi you go for a month or two with out a payment so you might be able to sneak by. send your check to citi before they get paid off. if you do it after I am not sure what they will do.

I have seen people pay their loan off with an ins check then we send them the difference.

I think your best bet would be to call their loss draft department directly and say you want to do the work your self. Then they will tell you their requirements, like a letter stating such, and they might be able to release your funds sooner.

Also, if you really want to get things moving you can overnight them the check, and ask if you provide a paid for return overnight evelope if they can just endorse it (you send it unsigned) since you will be doing the repairs then they can endorse it and overnight it back to you. then you can deposit it in your own account.

7

ok i found out some more information. i went on to citimortgage website and found out that if the checks are more then $10,000 then it would be a very hard proces:
CitiMortgage, Inc.
Loss Claims Exceeding $10,000

Upon receipt of the [required documents], funds will be released in a series of payments, made payable to you and your contractor, if applicable. Typically, this will occur two to three times during reconstruction until your home repair is complete. We will inspect the progress of your repairs, at no cost to you, during the repair process. The first disbursement will be issued upon receipt of the endorsed claim check and [required documents].

Please instruct your contractor, if applicable to execute the [Conditional Waiver of Lien] and submit a signed contract. If acting as own general contractor, your mortgage account must be current and the [Statement of Self-Contracting] letter is required and must be signed by all mortgagors on the loan.

We will send your next disbursement of the insurance claim funds after we receive and review all [required documents] and our inspection results are received confirming the status of repairs. Either you or your contractor, if applicable must be present at the time of the inspection. There is no charge for this inspection. Please call us at (866) 844-2198 in advance to schedule the inspection to avoid delays.

We will also need you to execute and submit a [Certificate of Completion of Repairs] This form must be signed by all mortgagors and mailed only when repairs have been completed. If you wish, you may fax final documents to (937) 525-8883.

We will send the final disbursement of your insurance claims funds to you, and if applicable, your contractor after we have reviewed that all [required documents] are received and our final inspection confirms the work is 95% - 100% complete. There is no charge for this inspection. If acting as own general contractor, please send us copies of all your paid/verifiable receipts. Please call us at (866) 844-2198 in advance of the work completion to avoid delays on this final inspection.

But if its under 10k

CitiMortgage, Inc.
Loss Draft Procedures
Loss Claims Up To And Including $10,000

If your mortgage account payments are current, please mail the insurance claim check to the address listed below. Be sure to include your loan number, phone number and current mailing address. When we receive the insurance claim check, we will endorse and promptly return the check to you via Federal Express delivery. The time frame for the endorse and release is 3-5 business days. Please note that if your address is a P.O. box, we will return your check via U.S. Mail.

If your mortgage payments are not current, please call us at (866) 844-2198 for assistance with your insurance claim check.

PLEASE DO NOT ENDORSE THE INSURANCE CLAIM CHECK

So im going to call my insurance company and tell them to stop payment on the checkk they cut me and break it up into 2 checks so taht the amount would be under $10k Problem solved. lol

8

yea thats the same deal here, but if its under 10k it can be endorsed in the branch.

i was going to ask you how much it was but i wasnt sure of citi policy