But there was one step left: her mortgage company had to endorse the check.
So he mailed it to his lender, thinking he would sign it and send it back, giving him the money he needed to hire a contractor.
Instead, Kenny learned, an unknown website, InsuranceClaimCheck.com, will hold and manage the funds. If he wanted to access the money, he would have to go through several more steps.
It took nearly a month for his lender, LoanDepot, to send him part of his last insurance check. Meanwhile, the contractor he hired to fix his house took on other work.
“They act like it’s their money,” Kenny said earlier this month, standing on concrete floors in his Destrehan home, under blue tarp-covered ceilings. “It’s my insurance money and they’re holding it hostage.”
A loanDepot spokesperson declined to comment.
Four months after Hurricane Ida tore through Southeast Louisiana, thousands of residents – already exhausted from a time-consuming insurance claims process – face a new set of bureaucratic hurdles with their insurance companies. mortgage.
Lenders often monitor how insurance proceeds are spent to ensure the property they have financed is rebuilt to market value. But each company handles the process differently, and there are few regulations governing how they should distribute the money.
“There is no rhyme, reason or continuity as to how much they hold and for how long they hold it,” said Douglas Quinn, president of the American Policyholder Association, an advocacy group for consumers. “They are often abusive with the practice.”
The frustrations come as no surprise to residents of southwest Louisiana, who are sixteen months into their own recovery from Hurricanes Laura and Delta. State Representative Phillip Tarver, a Republican from Lake Charles, introduced a bill during the last legislative session that would have allowed homeowners to receive a lump sum of their insurance proceeds up front. The proposal was not even heard by the committee.
“I tried to do something about it and couldn’t get any interest, no traction,” Tarver said.
This is subject to change. Louisiana’s second house leader, state Rep. Tanner Magee, a Republican from Houma, said he faced his own frustrations forcing lenders to unfreeze his insurance funds. He said lawmakers would reconsider how to put safeguards on mortgage companies during the legislative session beginning in March.
“It’s like its own cottage industry: how frustrating can we be?” Mage said.
Part of the problem is that there’s no consistency between lenders on what it takes to access the money, Quinn said. Sometimes they work out a reimbursement plan, requiring owners to pay the money for the repairs 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 there to give you that last little kick in the pants,” Quinn said.
In order for Kenny to have access to his insurance product, he first had to request an inspection, to determine the amount of work already done. When her inspector finally showed up in early December, she initially said she couldn’t climb her front steps, asking Kenny to take pictures instead. Once she filed her report, it took two weeks before her lender agreed to release the funds. It took another week for the check to arrive in the mail.
“I feel like shit that’s been flushed down the toilet and won’t come down,” Kenny, 63, said. “I just go around and around and around and around.”
Galen Hair, of Metairie-based Hair Shunnarah Trial Attorneys, said the process was so complicated that his company had two full-time employees dedicated to haggling with mortgage companies.
“There is no uniform set of rules for mortgage companies to follow,” he said, adding that lenders often change their procedures mid-stream without notice.
For those not backed by a law firm, the process can be downright maddening. Kenny spends his Fridays off calling InsuranceClaimCheck.comtrying to get them to release his funds.
Worse still, the website doesn’t even tell him how much money they hold. A request for comment via the website received no response.
The state’s Office of Financial Institutions, responsible for regulating lenders, can open an investigation if a consumer files a written complaint, chief examiner Michelle Jeansonne said. Generally, if insurance proceeds are less than $40,000 and a consumer is up to date with their loan repayments, they shouldn’t have too much difficulty accessing their funds, he said. she declared.
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 should 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 penny 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, although his insurer had not yet paid him. 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 his insurance product when it was first distributed, he is convinced that the work would have already been done.
“We’re going four months now and I’m no closer to doing it than I was three weeks after the storm,” Kenny said. “No one said this was going to be the process. I’m at my wit’s end.”
Are you having problems with your insurer or lender following hurricanes Ida or Laura? Send your story to [email protected] and a journalist can reach out.
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