Insurance claim check

my home (the roof) was damaged in a hail storm on june 26, 2008. the insurance co sent the claims adjustor out and she put on other things besides the roof, the total of the claim was 7300.00. the insurance co sent me a check in my name and the mortgage co the first of oct 2008. midland mortgage wanted me to send them a contract, contractors license and proof of the contractors insurance. the roofing co said that when i signed their contract i would need a $1500.00 down payment once i signed the contract and once that was paid they would send the information to midland mortgage. at the time i had been off of work for several months and was not able to come up with the down payment. my mortgage was current at the time because i had cash in my 401k to catch up the mortgage. i called the insurance co and explained the i had a leaking roof and couldnt get it fixed. they informed that if the clam had been less then $7000 they would have made the check out to me. in the meantime in jan 2009 i was not able to pay my mortgage and the back took the house back on oct 13,2009 every notice that i is the bank is taking the house back as is!! on oct 14 i received a 3 day to quit notice and had to sell my car to get a deposit for an apt. i live in the state of nebrasks. the day i moved i got my approval from social sec disability. in nebraska on a fha loan it cant be sold it has to go back to hud. the insurance stated that midland mort is a problem for them because they were having problems with them signing the check, they have been applying it to the escrow acct. i even offered to give them the check for the back mortgage payments because i have someone that would fix my roof. the mort co told me and i quote, "we get more money if we foreclose, so we dont do short sales or deed in lieu of foreclosure" they have alot of complaints on the internet. my neighbors had $30,000 in damage but a different mortgage co and their insurance check was made out to them. since i have left the house the house has been broken into and alot of damage was done. the insurance co said if i get a letter stating that the mort co no longer has interest in the property then they can make the check out to me. i sent them about 10 letters with no response. they have called me several and asked if i still lived in the house, i called them the day i moved and them that i was no longer living in the home and where they could find the keys, but still their records is showing that i am stilling living the house. they have told me to contact the foreclosure attorney. back when i first got the letter from the foreclosure attorney, i explained to him i would be glad to give them the check to catch up my mort, he was surprised that they wouldnt take the check. since the house was taken back as is, does that mean that it includes damages too? should i contact the foreclosure attorney here in omaha? any help would be great.

thanks

patty