Your Mortgage Company is on Your Insurance Loss Check

Don’t let this process draw you into “The Twilight Zone” Litespeed Construction is Here to Help!

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How to handle when your mortgage company is on your insurance loss check:

Questions & Answers


Mortgage Related Questions

Q: What materials should the homeowner request from their mortgage company?
A: Loss Draft Packet From Mortgage Company and a Authorization form for Contractor to communicate with Mortgage Company

Q: What are the typical things needed by the Loss Draft Department?
A: W9, Insurance, Contractors License Lien Release(s), Adjuster’s Estimate

Q: What do I need to do if I want my Contractor and Mortgage company to work together?
A: Get an agreement in writing from the Mortgage company allowing your contractor to speak directly on behalf of the Loss.

Q: What are the advantages of a Contractor being in contact with my Mortgage Company?
A: This can help with things like:

  • Scheduling inspections.
  • Requesting progress payments.
  • Submitting necessary paperwork.
  • Helping to finish up a job in a timely manner without delays.
  • Submitting any supplemental changes to insurance company.


Insurance Questions

Q: What does the time frame look like between the adjustment/supplement side vs. the Mortgage Loss Draft Department?
A: The adjustment and supplement side of insurance claims will be running at the same time as dealing with the mortgage loss draft dept.

Q: How long do these sorts of things take?
A: Supplements take around a month and The Loss Draft Department usually takes around the same time.

Q: When should changes to the Total Loss from Insurance Supplements be sent to the Mortgage Company?
A: Changes to the Total Loss from insurance supplements should be sent to the mortgage company as soon as they are agreed upon.

  • Example: from $10,000 to $14,000 agreed upon scope with insurance company needs to be shown to mortgage company on paper.

Are you Ready? SignWorking with your mortgage company’s loss draft department can be a very difficult and frustrating process. Usually it will add 1-2 additional months to the duration of a restoration project. Thankfully Litespeed Construction is here to help! Here is a general list of things that we can possibly help educate our potential customers about this process.


10 Steps to Dealing with Your Mortgage Company’s Loss Draft Department- With an Insurance Claim.

  1. The Insurance adjustment is occuring.  Your contractor’s supplementing process is usually occurring.  Property owners and contractors will be attempting to protect the property or prepare it for construction.  Owners will be choosing colors and details of construction.  All of these process take attention and time, and will generally happen concurrently.
  2. The way that your mortgage company ends up on your loss draft check is that they, the mortgage company, set a dollar limit.  If the value to reconstruct your loss, as a total overall amount of the claim, not necessarily the amount for the first check that you might receive, then the insurance company will list your mortgage company as a payee on the check and will require their endorsement for deposit or release.
    Example: Wells Fargo dollar limit to be added on your loss draft check $10,000 or more.  So if your insurance company mails you a check for $4,800 dollars and Wells Fargo is listed as a payee, the reason is that the amount total amount on the claim is more than $10,000 and the first check is then $4,800.
  3. Call your loss draft department if your mortgage company is a payee on the insurance check —
    Request a lost draft packet and get the mailing address of the loss draft department. You will be corresponding via mail.
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  4. Contractors will provide some standard information to the loss draft dept. So be prepared to have your contractor get that to your insurance company.
    The usual information your mortgage company will require is: Contractors License, Tax Id, Insurance, W9, some form of a contract you have to get your home repaired, your initial insurance scope, and any insurance supplements you may have (generally with the assistance of Litespeed)
  5. Agreeing on the scope of work that you want your contractor to complete will be a crucial part of this process.  Usually your loss draft dept will want a final, agreed upon scope between parties. Keep mortgage company up to date with changes in job cost/claim.
  6. Contractor needs to be prepared to give the mortgage company a series of Lien Releases on the property.  Usually there will be a Lien Release for each step of the possible inspections that the mortgage company will propose.
  7. Owner needs to give the contractor permission to speak with mortgage company about the loss draft.  This will make sense so that the contractor can understand how and with whom to correspond through this process.  A written request, on the mortgage company’s letterhead or form, will allow the contractor to correspond the entire duration of the construction. As a policy, Litespeed will supplement the claim for addition funds to cover the man hours and overhead that this process demands.
  8. Owners will be mailing your endorsed insurance insurance check(s) to loss draft departments along with the information and forms that they require you to send will be a step to move forward with.
  9. It is important to take good notes and have good documentation of who and when you speak with from your mortgage company.
  10. Your mortgage company will either mail you back an endorsed check or deposit it to your account if you bank with them.

Please note that these steps can vary in order, or may not even be applicable.  This is a rough outline of the process.

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The outcome of your insurance claim is a critical process for a homeowner, and does not come without risks. Contact Litespeed Construction today at (865) 297-3286 and simplify your process with professionals who can help guide you through each step.