Is this Insurance Fraud?

I was hired as the contractor for a for a homeowner in California who had sustained severe fire damage to her house.

The homeowner let her insurance and mortgage company know that I would be repairing her home and they have been issuing checks to her in both of our names. I have now completed 80%-90% of the work on her property. A check was issued from the mortgage company after an inspector was sent out to approve the work that was done so that another draw could be issued. Well, she has now received the check (2nd draw) and she is playing games…

I recently went out to her property so that we could go cash the check and continue working however, she told me she wanted to cash the check in her bank to use the money as collateral for a loan. I of course refused to do that and it has become quite obvious through the course of several conversations and events that she has no intention to pay me or to have me finish her house.

After a long dispute that day, I left the house and returned later to try and work things out. When I arrived to the property, the homeowner had called over the cable guy to install cable and she was moving things into the unfinished house. The house has not been finished nor has she been granted a certificate of occupancy yet, and it is still unsafe for her to live there. I had to call the city inspector to tell them that they were not allowed to live there until the house was finished. The inspector arrived later that day to kick them out and now she is pissed. I have also had to deal with her mom who seems to try and manipulate any and every situation possible. In fact, she seems to be driving the bus in this whole ordeal and most of the time throughout construction process I am forced to talk to her or her son to try and resolve any issues. But again, they just seem to be playing games and not want to pay me or sign over the check so I can be reimbursed for the work I have completed and also finish the house.

I have talked to the mortgage company about all of this and they said, "Unfortunately, we cannot get in the middle of disputes between the homeowner and the contractor, try and work it out." I have tried all week, and again, it has been nothing but games. I have also recently discovered that my third party authorization to speak with the bank had been removed weeks ago even when everything still seemed fine between myself and the homeowner. Also I was informed today by the homeowners cousin, who is a good friend of mine, that the homeowners mother has made several successful attempts in the past to commit fraud and he suspects she might try and cash this check without me.

I am owed lots of money and the bank says if we cant work things out to submit a final invoice to them so that they can have on file that I am owed X amount of dollars. They also told me, that the homeowner cannot hire anyone else until she pays me what I am owed and they will put a lien in place. This lady dragged out the claim for 2 years owes the bank about ,000 in back mortgage payments and now it seems as if she has found a sucker (myself) who was willing to help her out but I feel like I am getting screwed from all angles here and she just doesn’t care about anything but the money. The first time the first draw came I had issues with her trying to milk money out of me as well ‘for work that was done prior to hiring me’ which was total bs because that house was an absolute mess when I got there.

One of my big questions is this…Why hasn’t the mortgage company foreclosed if the homeowner owes them so much money and I have made them aware that she is not going to pay me what I am owed. There will be no money left for her to catch up on her payments once her home is complete and the funds to her claim are exhausted also the house is not complete and she is holding everything up.

Should I contact the insurance company and let them know whats going on? When we first started this whole process they seemed really irritated with her because she has been taking ages to process her claim. Can I contact the authorities? >>> Is this insurance fraud? <<< This is all BS and I am beyond frustrated and I don’t know what to do. Any professional advice would be greatly appreciated. The last I spoke with the homeowners mother they were still pushing me to cash the check at there bank. But I have been informed by the homeowners cousin (my friend) that if I do that, that she plans on running away with the money. The homeowner and her family have been staying in Arizona throughout this whole process and only come down every so often to check on progress of the house or when a check comes. Someone please help.

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