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Can a mortgage company keep money from a homeowners insurance settlement without paying contractor?

I work for a contracting company and recently we changed the roof on a house that was damaged by a storm. The insurance company sent a check to pay for the work done on the roof. The check was drawn out to the owner of the house and the mortgage company, the owner told the mortgage company to keep the money from the insurance settlement to pay for his past mortgage payments and now the owner has not paid us (the contractor) and the mortgage company refuses to hand over the proceeds to us (the contractor), when the roof has been completely repaired. Is this legal?