Two-Party Check From Insurance Company For New Roof, But Buyer Wants to Buy It Now

[Burt L.]

I have a property under contract and a buyer to buy the property. The seller has just informed me of a check from the insurance company she has for a new roof. It is a two-party check, written to her and the mortgage company. The roof is performing, though old, and the buyer is okay with the roof.

Can the seller endorse the check over to the mortgage company and as part of the sale, pay down the mortgage, and then reduce the price by the same amount to myself, and the buyer?

The buyer wants to close on the house and not have to wait on a new roof now, or for other approvals. If the loan is being paid off, the mortgage company would presumably not have an interest in whether the roof is replaced or not. How can I approach this?