Life Insurance Loan Policy Issue

Lars8868

New Member
10
Close friend of mine has a problem-

His mom took loan against whole life insurance policy for my friend, his sister, and brother. Each check is for about $4-5k. The money was all for him while mom goes to India for couple months and he promised to pay it back. When the checks arrived in mail he went and deposited in bank. Only the check payable to him was successfully deposited but the other two checks payable to his brother and sister were not. He called the bank and they told him these checks will be returned in mail because he cannot cash checks without his name on it.

His brother and sister both go to boarding school in Texas while he works and lives in NY/NJ area so having them sign the check or going to bank with them in person is not a viable option.

Any suggestions to cashing the check?

He thought about forging endorse signature of brother and sister on back of check but bank said they still have to be present with ID to process.

My friend banks with Bank of America and was suggested bringing in the checks to Chase(which is origin of check) with brother and sister endorse signature on back and try to cash there?

Maybe someone is familiar with check cashing store manager in NY/NJ that can overlook minor detail on legitimate check?

I told him that he could call his mom and her call Insurance company to place stop payment on two checks and have them resent payable to him. Is this an option?
 
As a former bank manager, I would NOT allow that transaction to happen - especially on a $5k check. A couple hundred dollars... maybe, but not $5k.

The check must be made payable to the individual and deposited into an account where the payee of the check is also a signer or owner of the banking account.

Just get the checks reissued or go to Chase bank to negotiate the check.
 
By get the checks reissued do you mean have his mom(who is the owner of life insurance policy for my friend and his siblings) call the insurance company and have them stop payment on the two checks and have insurance company send new ones out under his name?

Is this legal?

Time is also a factor here and that might take another 1-2 weeks. My friend said going to check cash shop would be fastest way if anyone is familiar with one that can accommodate this situation and he would not mind paying 3-6% fee. I grew up with this guy and I know the checks are legit.
 
Yes and yes. It is done all the time.

Check cashing places won't touch a $5k check. Those places are for people who can't get a bank account.
 
I've heard differently about the check cashing places but thank you very much DHK for your help.

His plan: He told me he will go to Chase tomorrow with substitute check endorsed on back by his brother and sister and if they refuse to cash he will go with stop payment route and have checks reissued.

Thanks again DHK
 
You can also try to deposit through an ATM. I have found the quality control much lower when you deposit through an ATM versus teller with most banks. It may work and it may also get rejected.
 
Oh, even if you DID try to put it through the ATM, it MIGHT give you the deposit credit for 1-2 days before reversing the check back out. Don't assume that the check cleared and you have funds. If you do this (which I wouldn't), wait about 3-5 days before withdrawing the money. Otherwise, when the bank reverses the check, you may not have the funds to clear the balance.
 
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