Banks sitting on Sandy claim funds (1 Viewer)

coldseat

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I'm not surprised in the least. What a shame. :jpshakehead:
 
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efil4stnias

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its a joke.

I remember having to go thru 3 installments/inspections after a fire claim I had in 2006 w/ Citibank. They sent out a lady who showed up in a 1986 Ford f150 who had to keep the vehicle running for fear it wouldnt start up again. Thats right, she was the one inspecting and signing off on the work that had been done up to that point.

That whole process extended my getting back in my home by more than 3-4 weeks. Contractor would not start next phase until check was received. Cant blame him.

Furthermore, part of my claim checks were for "content/loss of use". I fought tooth and nail with Citi that they had ZERO right to that portion of the checks. I provided claim breakdowns to attempt to get that money up front. It didnt help though, because i still needed to get the funds to the contractor to get started. So basically, had to wait til final installment to recoup content/loss of use money.
 

bclemms

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Such a simple problem to fix. Allow the banks a 7 day grace period before charging them interest at twice the rate of interest they can earn on any money that hasn't gone out.

Interest at 1.5% for 6 months on 150 million is over $6 million.
 

dtc

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This is completely understandable and the article is another that's so short to fill a little on page spot on a web site and excite people that it doesn't explain it well at all. Of course, I'm not defending slow paying for due amounts or the inefficiency, but there are complications.

When insurance pays a claim that has a mortgage, it's the banks duty to make sure the repairs are done before the money is released. If a contractor is doing the work, it's the bank's duty to make sure the contractor is getting paid and his subs and material suppliers are, as well.

Were a bank that's guaranteed or insured by federal insurance to release money to a home owner who has not done repairs or paid his contractor, then we, the tax payer, could end up liable for an abandoned home in disrepair that the homeowner walks away from and leaves the bank stuck with a mortgage.

It's simply not prudent to release tens or hundreds of thousands of dollars to homeowners without verifying repairs are done and paid for. Look no further than to the millions and millions in road home grants that were disbursed to folks who never did the repairs on their houses. And, to make matters worse, there are people who are significantly behind on mortgages or even entering foreclosure/in foreclosure who cannot be given the proceeds of any insurance payments.
 
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efil4stnias

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This is completely understandable and the article is another that's so short to fill a little on page spot on a web site and excite people that it doesn't explain it well at all. Of course, I'm not defending slow paying for due amounts or the inefficiency, but there are complications.

When insurance pays a claim that has a mortgage, it's the banks duty to make sure the repairs are done before the money is released. If a contractor is doing the work, it's the bank's duty to make sure the contractor is getting paid and his subs and material suppliers are, as well.

Were a bank that's guaranteed or insured by federal insurance to release money to a home owner who has not done repairs or paid his contractor, then we, the tax payer, could end up liable for an abandoned home in disrepair that the homeowner walks away from and leaves the bank stuck with a mortgage.

It's simply not prudent to release tens or hundreds of thousands of dollars to homeowners without verifying repairs are done and paid for. Look no further than to the millions and millions in road home grants that were disbursed to folks who never did the repairs on their houses. And, to make matters worse, there are people who are significantly behind on mortgages or even entering foreclosure/in foreclosure who cannot be given the proceeds of any insurance payments.
Then the banking industry can adopt procedures that will hold those funds for those mortgages that are in arrears/preforclosure etc. I would imagine that its relatively simple to do with all the data tech now available to mortgage companies. They were able to adopt the same algorithms during the housing boom for packaging sub-primes in relatively short order, i would imagine they can do the same for in-house data sorting.

And unlike the Road Home mess, the banks have legal avenues to pursue someone who doesnt make the necessary repairs.

I get the argument. I truly do. But when they send out a middle aged woman, who has ZERO construction related experience to inspect my on-going repairs, I have little faith in what their motives are. Meanwhile, they sit on my $80,000 that gets disbursed over a period of 4 months. Thats not acceptable and not the way things were done when I bought a home.

Furthermore, since CitiMortgage doesnt have "branches" locally, I had to overnite each check, at my cost, wait 3-5 days for it to clear, then another 2-3 days for them to process my builders invoice, and then another 2-3 days to receive ( business days, not week days )
 

dtc

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Then the banking industry can adopt procedures that will hold those funds for those mortgages that are in arrears/preforclosure etc. I would imagine that its relatively simple to do with all the data tech now available to mortgage companies. They were able to adopt the same algorithms during the housing boom for packaging sub-primes in relatively short order, i would imagine they can do the same for in-house data sorting.

And unlike the Road Home mess, the banks have legal avenues to pursue someone who doesnt make the necessary repairs.

I get the argument. I truly do. But when they send out a middle aged woman, who has ZERO construction related experience to inspect my on-going repairs, I have little faith in what their motives are. Meanwhile, they sit on my $80,000 that gets disbursed over a period of 4 months. Thats not acceptable and not the way things were done when I bought a home.

Furthermore, since CitiMortgage doesnt have "branches" locally, I had to overnite each check, at my cost, wait 3-5 days for it to clear, then another 2-3 days for them to process my builders invoice, and then another 2-3 days to receive ( business days, not week days )
Look, dude, I'm a contractor. Tons of my work is insurance work. I understand the 3 day turnarounds that take 2 weeks and the excessive paperwork. I understand that banks do take a while, but an old lady in a broken truck can tell whether there are shingles on a roof and whether a permit has been pulled and inspection performed. She can tell whether your walls are up or not and whether your cabinets are flood damaged and or or brand new.

The article made it sound like all this money is being held because banks won't process the paperwork and while there's got to be some inefficiency and foot dragging and the $30 charges for wiring you your own freaking money ought to be illegal, there is no way that all of that money should be released to homeowners.

And, for what it's worth, banks aren't having a problem denoting which mortgages are in arrears or in foreclosure and that is not a reason for the hangup. Those loans go to special officers who deal with it sometimes directly with contractors instead of releasing the funds to folks who might squander it and leave them and the tax payers who fund the mortgage insurance on the hook.

You cannot expect a bank to release all of the claim money in advance of any work being done. Thems the breaks.
 

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