Why are checks Reissued?

Sometimes when you upload a check(s), the check(s) that are uploaded can be reissued for several reasons.

Here are the reasons that a check may need to be reissued:

The wrong Mortgage Company is listed on the check that was uploaded.

Most of the time, the property owners (insured) forget to update their insurance carrier with their updated mortgage information. The insurance carrier issues a check with the last information they have on file. In this case, the incorrect mortgage company is on file since the loan was transferred from one mortgage company to another.

• So how do we notice this?

When we need to confirm the loan with the mortgage company, sometimes we won’t be able to corroborate the information through our tools. This means two things: The loan information shared is incorrect (wrong loan number) or the loan is no longer with the mortgage company on file.

If we don’t have the tools to confirm, we will send the claims package and call in 2-3 business days to follow up. This is generally how long it takes for them receive the package from IINK. Once the mortgage company responds to our claims package, we will be able to confirm if it is the correct mortgage company on file.

In the cases that the mortgage company is incorrect, we will need to contact the Property Owner (the insured) to try to collect the correct information: the correct loan number, correct mortgage company, and/or any other information that contains a mistake.

• What if the loan was transferred?

If the loan was transferred, we will need to know which mortgage company it was transferred to and whether it’s the same loan number or if they have a new one. Once we have that information, we can proceed to call the new mortgage company to verify whether they can endorse the check as is (with the old MC listed on it) or if the check/s needs to be reissued.

We do this to confirm the information, even though we might have it on file, and because sometimes the check has the letters ISAOA ATIMA written on it, and that sometimes allows the new mortgage company to endorse the check as is. 

NOTE: ISAOA ATIMA stands for "its successors and/or assigns as their interests may appear."

• Loan originators (lenders) commonly use this term on the mortgagee clause, since they have the option to sell the loan to another entity or assign servicing rights to a third-party servicer.

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Once we confirm with the correct servicer that the check needs to be reissued, since they will not endorse the check as is, you will see 3 different statuses:

  1. Mortgage Company will not endorse the check even if it has ISAOA/ATIMA.

This means that we have reached out to the mortgage company to confirm if they can endorse the check as is since it has ISAOA/ATIMA on it.

Keep in mind though, the check must reflect their name and must be reissued since they will not endorse it even if it has ISAOA/ATIMA on it. The current mortgage company will need a letter of satisfaction from their previous mortgage company to send to their insurance agent. In this case, please request the insurance carrier to reissue the check.

  2. New Mortgage Company, needs to be reissued.

If the property owner has a new mortgage company, the check will need to be reissued. The property owner will need a letter of satisfaction or a loan transfer notice. The next step is for them to contact their insurance agent with this information to get the check reissued.

  3. Wrong Mortgage Company, needs to be reissued.

If the property owner has the wrong mortgage company, the next step is for them to contact their insurance agent with this information to get the check reissued.

Check has gone over the expiration date.

When we receive the claims, we will check the box on the check that says: “This check expires in (X) days.”

In this case, we have to evaluate how many days are still outstanding for the check(s) to expire and if the claim will be monitored or non-monitored. 

• Monitored claims: if the claim is monitored, it’s possible to process, even with a tight expiration date, since once the check(s) arrives at the mortgage company, they will be put into an escrow account and the funds will be released in portions. (Minimum days: 20)
• Non-monitored claims: if the claim is non-monitored, it can be more complicated since the check has to arrive at the mortgage company, be processed, and then sent back before the expiration date on the check. (Minimum days: 20)

Please keep in mind though, in most of these cases, we will have to reissue the check(s) since there is not enough time for them to be sent to the mortgage company, get processed by the mortgage company, and then sent back.

Loan is paid in full.

A reissue can occur if the property owner does not update their insurance carrier with their updated mortgage situation and letting them know that their loan was paid in full. In this case, the mortgage company will inform us that the loan has been paid in full and the loan is not being serviced by them. We will always confirm with the property owner (insured). 

The property owner (insured) will need to confirm if the loan has been paid off or transferred to a different company. We need the correct mortgage company in order to continue assisting with their claim. They can always reply directly to us within the app.

Once the information is confirmed and the property owner informs us that the loan has been paid in full and there is no longer an active mortgage on the home, the check will need to be reissued since the mortgage company can no longer be listed.

In this situation, the check needs to be reissued as the homeowner no longer has a mortgage on the home. They will need a letter of satisfaction from the mortgage company to send to their insurance agent. They will need to request the insurance carrier to reissue the check.

Couple things to keep in mind:

• The old mortgage company can’t ever endorse a check(s) when they no longer have the loan.
• The new mortgage company will not endorse the check(s) until their name is listed on it.

 

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