Saxon Mortgage to endorse check, keeps it instead

JW in North Carolina said “Got an insurance check for hail damage. Saxon employee said mail it in, we will endorse it and send it back to you. She calls back later and tells me that her manager has looked at my file and they will need to keep my insurance money in escrow.

Then when I have a certified contractor send proof of work, they will send back a little at a time. I am not behind in my house payments by the way. I told her I would tear up the check before I let them keep my money.

Does anyone know if what they are doing to me is legal? Can I take legal action against them for going back on their word and wanting to take that money? From all the complaints against this company that I am seeing, I would love to join in on a lawsuit against them.”