Warren, MI asked in Real Estate Law, Banking, Business Law and Insurance Defense for Michigan

Q: Mortgage company forcing me to pay for their inspection on an insurance claim to release insurance check.

The current mortgage company acquired my loan a few years ago as the original lender sold it off. I have never been late, have a credit score of well over 800, paid extra over the years, and have 23 months until the loan will be satisfied. As such I have over 90% of the equity (even by the origination appraised value, likely more if appraised today). I had damage done by animals to my roof. I did my due diligence and insurance company was great. The lender now wants me to pay $60 for their requirement for an inspection and apply that to my loan balance. To me this seems unfair from the standpoint I didn’t ask for damages and did my due diligence and if they don’t like my (I’m an engineer), the insurance company, and city inspection, then they need to pay for their own. Applying it to my balance, seems like it also is changing the terms and conditions of my mortgage into a revolving credit account only they can decide when and how I can tap it while they earn interest. Advise

1 Lawyer Answer
Kenneth V Zichi
Kenneth V Zichi
  • Fowlerville, MI
  • Licensed in Michigan

A: What does your mortgage say? IF it says they can randomly require you pay for inspections, then yes, they can do what you describe. If it says they can force you to pay for inspections whenever work is done on the property that too is something they can do.

If it doesn't say that, it's open to interpretation. Is $60 worth suing them and paying thousands of dollars in attorney's fees over? Maybe the BEST course of action is to pay off the loan and stop giving them any income. It seems like you should be able to get a personal loan or use your savings to pay off the final 2 years of principal balance and not dealing with companies that want to make your life difficult is probably a good thing for other reasons too!

Remember, you're complaining about $60. How much effort do you want to put into this? Just pay off the loan and TELL THEM WHY you're no longer doing business with them.

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