Home owners insurance claim

We had water damage to laminate floors. State Farm issued a check to us and mortgage company. We had extra boxes of new laminate laid 2 years ago. Myself, son and friend removed, dried and replaced damaged flooring. Mortgage company sent an inspector out and it passed inspection. We were told by phone to send a letter (with tracking number) why we do not have receipts, which we did. The mortgage company was just waiting for claims adjuster from State Farm to confirm, which he did. We were told there was no problem and to go ahead and send in check for endorsement. It was returned without mortgae company endorsement. We called and were then told that since we didn't have receipts they would not sign it. Even though damaged flooring was replaced and past their inspection! We did everything they had requested and then blew us off. Unfortuneatly it was over the phone, which they have a recording of approval and confirmation that they would sign the check and return it. I even mentioned this when we called. But.... At this point we're considering a lawyer, which we can't afford or just tearing up the check!