They got their insurance money after Hurricane Ida. Now they are fighting their mortgage company. [The Advocate, Baton Rouge, La.]

December 27 — When Steve kenny first received a check from his insurer for the damage caused by Hurricane Ida, he finally thought he had the money to repair his Saint-Charles Parish residence.

But there was one step left: his mortgage company had to endorse the check.

So he mailed it to his lender, thinking they would sign it and send it back, giving him the money he needed to hire a contractor.

Instead, Kenny learned, from an unknown website, InsuranceClaimCheck.com, hold and manage the funds. If he wanted to access the money, he would have to overcome several other hurdles.

It took his lender, LoanDepot, nearly a month to send him part of his last insurance check. Meanwhile, the contractor he hired to repair his house took on other work.

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“They act like it’s their money,” Kenny said earlier this month, standing on concrete floors in his Destrehan house, under ceilings patched with blue tarpaulin. “It’s my insurance money and they’re holding it hostage.”

A spokesperson for LoanDepot declined to comment.

Four months after Hurricane Ida hit the southeast Louisiana, thousands of residents – already exhausted from a long insurance claims process – face a new set of bureaucratic hurdles with their mortgage companies.

Lenders often monitor how insurance proceeds are spent to ensure the property they financed is rebuilt to market value. But every business handles the process differently, and there are few regulations governing how they should distribute the money.

“There is no rhyme or reason or continuity on how long they will hold and how long they will hold it,” said Douglas quinn, president of the American Association of Policyholders, a consumer advocacy group. “They are often abusive with the practice.”

Frustrations come as no surprise to people in the southwest Louisiana, who are sixteen months into their own recovery from Hurricanes Laura and Delta. Rep. state Philippe tarver, a Charles Lake Republican, introduced a bill in the last legislative session that would have given homeowners the right to a lump sum of their insurance product up front. The proposal was not even heard by the committee.

“I tried to do something about it and I couldn’t get any interest, no traction,” Tarver said.

That may change. The second leader of Louisiana House, State Rep. Tanner Mage, a Houma Republican said he had to deal with his own frustrations in getting lenders to release his insurance funds. He said lawmakers would reconsider how to put safeguards on mortgage companies during the legislative session starting in March.

“It’s like your own cottage industry: how much can we frustrate you? Magee said.

Part of the problem is that there is no consistency among lenders on what it takes to access the money, Quinn said. Sometimes they work on a reimbursement program, forcing homeowners to pay the repair money out of their own savings before releasing the allocated insurance funds.

“You think you’re about to cross the finish line and then there’s your lending institution out there to give you that last little kick in the pants,” Quinn said.

In order for Kenny to access his insurance proceeds, he first had to request an inspection, to determine how much work had already been done. When her inspector finally showed up in early December, she first said she couldn’t climb her steps, asking Kenny to take pictures instead. After she filed her report, it took two weeks for her lender to agree to release the funds. It took another week for the check to arrive in the mail.

“I feel like poop that’s been flushed down the toilet and doesn’t come down,” said Kenny, 63. “I’m just going round and round and round and round.”

Galen’s hair, with SmallholdingHair Shunnarah Trial Attorneys, based at Hair Shunnarah, said the process is so complicated that his firm has two full-time employees dedicated to bargaining with mortgage companies.

“There is no uniform set of rules for mortgage companies to follow,” he said, adding that lenders often change their procedures halfway without notice.

For those who aren’t backed by a law firm, the process can be downright maddening. Kenny spends his Fridays without a job calling InsuranceClaimCheck.com, trying to get them to release his funds.

Worse yet, the website doesn’t even tell him how much of his money they have. A request for comment through the website was not answered.

The states Office of Financial Institutions, charged with regulating lenders, can open an investigation if a consumer files a written complaint, the chief examiner said Michelle jeansonne. As a general rule, if the insurance proceeds are less than $ 40,000 and that a consumer is up to date with their loan repayment, they shouldn’t have too much difficulty accessing their funds, she said.

Consumers should have the right to a clear and consistent policy regarding how claim funds are allocated and released for redress, Quinn said. Lenders should also distribute the funds in advance, rather than by repayment, he said.

Additionally, consumers are expected to earn interest on money held by mortgage companies, Quinn added. He said that for six years a bank held $ 244,000 in insurance proceeds for a victim of Hurricane Sandy and did not pay him a dime in interest. “They act like it’s their money,” Quinn said. “It’s corporate arrogance.”

Kenny is one of the luckiest survivors of Hurricane Ida. A contractor agreed to repair his roof several weeks after the storm, even though his insurer had not yet paid for it. But since then, his recovery has stalled. The contractor he found to install new plasterboard and flooring is now booked until March. If he had had the proceeds of his insurance the first time he distributed, he is convinced the job would have already been done.

“We’re now four months into it and I’m no closer to getting there than three weeks after the storm,” Kenny said. “Nobody said this was going to be the process. I’m on my nerves.”

Are you having problems with your insurer or lender as a result of Hurricanes Ida or Laura? Send your story to [email protected] and a reporter can reach out.

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(c) 2021 The Advocate, Baton Rouge, La.

Visit The Advocate, Baton Rouge, Louisiana at www.theadvocate.com

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