house fire settlement

bazzaffc

ive been offered a cash settlement by my insurance company after a house fire. my bank, the nationwide, have said they will not allow this unless i pay off my mortgage first. i have about 25k left to pay but if i pay it out of the settlement there wont be enough money to have the works carried out on the house. is this normal?
thanks
baz

Astaroth

A settlement shouldnt be enough to pay off a mortgage and also pay for repair works, it should be enough simply for the repair works/ replacement items.

Is it building and contents claim or just buildings? Was the property declared a total loss?

bazzaffc

no not a total loss but the damage is estimated at 100k so if they give me 100k and i pay out 25k to the bank its possible i'll have a shortfall of 25k. the contents is seperate.
thanks
baz

Anihilator

Well tell the insurers you wish them to repair the house. Nationwide are covering themselves perfectly reasonable as with a cash settlement of 100k you could quite easily do a runner and leave them with a worthless asset as collateral.

bazzaffc

hardly a worthless asset. the house is valued at 750k and i owe 25k. why would i or anyone else run away from that?
thanks
baz

dacouch

I've not seen a mortgage company do this before, they have the power to request it but it must be very rare.

Try giving the FSA a quick call, they regulate Insurers and Nationwide.

Is the home insurance via Nationwide as well?

Astaroth

Was going to ask what grounds Nationwide are foreclosing the mortgage on? They are entitled to do it I'm sure but it is unusual and would expect a full explaination for their actions.

Anihilator

bazzaffc wrote: »

hardly a worthless asset. the house is valued at 750k and i owe 25k. why would i or anyone else run away from that?
thanks
baz

I somehow doubt its worth anywere near 750k burnt out though:rolleyes:

bazzaffc

dacouch wrote: »

I've not seen a mortgage company do this before, they have the power to request it but it must be very rare.

Try giving the FSA a quick call, they regulate Insurers and Nationwide.

Is the home insurance via Nationwide as well?

Yes it is but this is not in question ...thanks

bazzaffc

Anihilator wrote: »

I somehow doubt its worth anywere near 750k burnt out though:rolleyes:

of course it isnt at the moment.... more like 650k as is stands. all the same i still wouldnt run away leaving them with a house with about 625k equity on it. would you?
thanks
baz

bazzaffc

Astaroth wrote: »

Was going to ask what grounds Nationwide are foreclosing the mortgage on? They are entitled to do it I'm sure but it is unusual and would expect a full explaination for their actions.

i dont know yet, i should find out from my insurers today.
thanks