There are two basic scenarios when sending out Your Company’s hard earned claim check out for endorsement. First, and for most jobs, you will be sending out your check after your work is complete for a final endorsement from which ever mortgage company happens to be on your check. Second, and usually only for large jobs/claims, you will send out your check as soon as possible so that the listed mortgage company can deposit your check and begin sending you draws (partial payments) for the job you are working on. There are, of course, exceptions and different strategies regarding this concept; for further information please read our post Draws: Definitions and Strategies.
For the first and most common scenario of sending out Your Company’s claim check once your work is complete, you DO NOT sign your check before mailing/overnighting it to the listed mortgage company. For any scenario where your check, literally meaning the physical check you are sending, is going to be endorsed and sent back to you, you never want to sign it. The main reason is that if Your Customer has signed it, Your Company has signed it, and now the mortgage company has stamped it–it is now a live check! Even if you have done everything we outline for Your Company to do, sometimes (many times) mortgage companies make mistakes. Sometimes, even though Your Company’s Third Party Authorization is on file, the check will be sent to the wrong (Your Customer’s) address. The last thing you want is Your Customer to have a live $25,000 check! To reiterate, for almost all endorse and release situations, you DO NOT want to sign your check before overnighting it to a mortgage company.
The second scenario mainly occurs when Your Company is working on a large job/claim and you need to recoup some of the claim money up front for labor and materials, aka you need to take draws. In this situation Your Company WILL NEED TO SIGN the check. The reason for this is simple: when releasing draws mortgage companies deposit the check into an account first, then release draws (write portion checks) out of that account. If you don’t sign the check, they can’t deposit it. This will add WEEKS to Your Company getting your first draw as many times they will send the check back via regular mail, a route that will usually take ten business days! Only for you to have to sign and send it out again. So, the short version:
Most endorse and release: DO NOT SIGN
Most draw schedules: SIGN
Now go and get Your Money Faster.