With the recent hurricane activity damaging so many properties, those people who suffered damage are grateful for their insurance coverage.  But what often happens is that their mortgage company gets involved, and the hurricane is the least of their problems.

A client whose home got damaged in a hurricane thought it would be nothing more than an inconvenience to get the property repaired.  He filed a claim, met with the adjuster, and checks were dispersed – repairs to the home should be done soon.  That is where things came undone.

The mortgage company received the checks directly from the insurance company, which were made out to mortgage company, and the homeowner, and deposited them in an escrow account.  The homeowner was then told to get any of the funds the homeowner would need to meet the bank’s “requirements.”  After the better part of a year of trying to meet the bank’s “requirements,” the homeowner learned that funds were already dispersed by the bank to a third party who forged information on the banks forms and submitted them. 

Why did the bank pay these without question, but would not help the homeowner get his funds?  And why did the bank issue checks to in the third party’s name alone against the bank’s policy?  How was the homeowner going to pay for repairs without the insurance proceeds?  And why was the bank saying the issue was between the homeowner, and the contract that was never hired by the homeowner?

At wits end the homeowner contacted an attorney to get involved.  Similar treatment was given to the attorney by the bank, policies, procedures, you have to wait, etc.  In the meantime, the local government has declared the home uninhabitable and has it scheduled for demolition.  Letters mailed by bank never arrive, escalations to departments were not received by the departments, and promises made not kept, just more excuses about “policies.”

Faced with the prospect of losing his home, and all the equity it once had, the homeowner is now looking at having to commence legal action against his mortgage company that without legal justification took his funds, and gave them to third party simply because they asked.  Now I will say there is more to this story that likely involves a bank employee working with the third party, but the underlying issue is why does the bank treat its customers like criminals, and pay third parties without verification?  Unfortunately, banks becoming adversaries of their customers is becoming more and more common.

The purpose of this article is simple, a home usually represents a significant portion of an individual’s wealth, treat it as such, and get legal advice whenever an event occurs that may threaten it.