Question on insurance work on short sale home

[wrigley1976]

My previous residence is currently in a short sale. We are about 3 months away from the bank taking it.
We experienced a burst pipr yesterday- resulting in extensive water damage. All the carpet, hardwood, most of the drywall etc will need to be replaced.
Any issues with getting the work done considering we are close to the bank taking the house?
We still have it covered by insurance.

[BassBoy]

I don't see why you couldn't file a claim, if that's what you're asking. As long as the home is in your name and the insurance is paid up to date, you're responsible for the home anyway. I don't believe the isurance company and the lender communicate what's going on, so it's not like the insurance company would deny the claim since you're headed for foreclosure. Besides, the home is up for sale so it wouldn't look bad that the home was vacant. You see that all of the time.

[StartingOver08]

You might want to check with your insurance agent. From what I have seen, when the insurance company makes out the checks in those type of circumstances they make the check payable to the borrower and the lender. Then the lender has the borrower endorse the check before they will sign it over to the borrower - and natually if you are in arrears, you don't get the check. Talk to your insurance agent first.

[wrigley1976]

Here is the deal. There was no issue with the house being vacant. The adjuster said to gut the house. He issued me an initial check to start the work. He did make it out to my lender and I. My wife is going out to have them stamp the check so we can pay the contractor for work already done and a new furnace which was damages due to the water.
We are in arrears on the house and owe.
Do you think they will want to keep the check- or let us fix the house so we can sell it and get them all the money?