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(CNN)   Worried that hurricane victims might not know how to best spend a sudden windfall of insurance money, banks have decided to just "hold on" to about $210 million in Sandy payments. You know, for a rainy day   (cnn.com) divider line 73
    More: Asinine, Superstorm Sandy, Andrew Cuomo  
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11948 clicks; posted to Main » on 13 Feb 2013 at 10:29 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-02-13 12:19:39 PM
Remember when after the hurricane Obama said he was going to cut through the red tape and get the victims taken care of?

Yeah, that was right before the election.

Obama 2016.
 
2013-02-13 12:22:12 PM

IkonOlator: Girion47: GAT_00: ZAZ: An underwater house leads to an underwater mortgage. In a no recourse state I take the money and run. Move out, stop payments. The bank forecloses on a wreck. I use the money to build a new house. So I understand why the banks might want to keep track.

And the bank has no right to decide it knows best and withhold money, none.

Not to mention the banks might not even hold the mortgage on the house that they're witholding the money from.

Bad reporting is bad reporting.

What the article means is that the checks from the insurance companies are payable to the order of "John Homeowner and The Lending Bank that Holds JH's Mortgage (in other words, the Mortgagee)."  In order for such a check to be deposited, it must be indorsed by BOTH JH and The Mortgagee.  It is not the bank where JH has a deposit account that's causing the holdup; it's the lack of indorsement by the Mortgagee.

The reason the insurance companies draw the checks payable to the order of both JH and the Mortgagee is because the Mortgage requires it, as does the insurance contract.  After all, the house is Mortgagee's collateral and there is an obligation to repair the house (rather than take the money and move to the Bahamas, leaving the lender to foreclose on a rotted-out moldy shell worth zip).


You sound knowledgeable, but you keep misspelling a key word.
 
2013-02-13 12:38:22 PM
After Hurricane Floyd, I had some minor shingle damage that caused a leak in the roof. Rather than wait on the insurance adjuster to visit (they were really busy since Eastern NC was totally underwater at the time), we got the roof repaired and paid for it ourselves. When the adjuster showed up, we gave him the receipt for the roof repairs, and he then added more money for a slightly damaged gutter, discolored ceiling (where the water leaked), possible damage to the items in the closet, and repairs for all the above. The check was written directly to me. Now that was many years ago, or does each state have different rules for insurance money pay outs?
 
2013-02-13 12:38:45 PM

GORDON: Remember when after the hurricane Obama said he was going to cut through the red tape and get the victims taken care of?

Yeah, that was right before the election.


Remember when Obama blocked the floor vote for the House to pass the full bill to grant emergency assistance?  Or when, after blocking the floor vote, adjourned the House for the weekend?  Yeah, neither do I.
 
2013-02-13 12:39:37 PM
They have to fund the bankers bonuses from somewhere.
 
2013-02-13 12:50:08 PM

sethen320: You sound knowledgeable, but you keep misspelling a key word.


Actually, I tend to make things up as I go along,

If you're referring to my use of "mortgagee," you're mistaken.  If you're referring to "indorse" , you're also mistaken.

Oh, and if the lender won't indorse the check and party that has the money in the interim is the insurer (the drawer of the check) not the lender.

Ken
 
2013-02-13 12:51:57 PM
How 'bout we allocate one million dollars of that money for kicking bankers in the nuts?
 
2013-02-13 12:56:05 PM
Sounds like Social Security to me.
 
2013-02-13 01:15:13 PM

born_yesterday: You should go ahead an let me hold on to that money for you.  You don't want to put it in a bank.  See, banks get robbed.  Nobody's gonna rob me.


That movie gives me guilty pleasure.
 
2013-02-13 01:16:46 PM
farm4.staticflickr.com
 
2013-02-13 01:27:22 PM

Glancing Blow: The reason the insurance companies draw the checks payable to the order of both JH and the Mortgagee is because the Mortgage requires it, as does the insurance contract. After all, the house is Mortgagee's collateral and there is an obligation to repair the house (rather than take the money and move to the Bahamas, leaving the lender to foreclose on a rotted-out moldy shell worth zip).

Yes, I agree, but I think the money should be held in escrow at a third party, not providing float for the lien holder.


Escrow services don't work for free.  That would cost the homeowner a cut.

Could let the bank hold the money and assume responsibility for paying repair contractors promptly.  IDK if contractors would go along with that.
 
2013-02-13 01:30:06 PM

Merltech: Are they going to pass along the money made off of interest?


If the check's not endorsed and deposited, the check's issuer is earning the interest.
 
2013-02-13 01:41:32 PM

Bendal: After Hurricane Floyd, I had some minor shingle damage that caused a leak in the roof. Rather than wait on the insurance adjuster to visit (they were really busy since Eastern NC was totally underwater at the time), we got the roof repaired and paid for it ourselves. When the adjuster showed up, we gave him the receipt for the roof repairs, and he then added more money for a slightly damaged gutter, discolored ceiling (where the water leaked), possible damage to the items in the closet, and repairs for all the above. The check was written directly to me. Now that was many years ago, or does each state have different rules for insurance money pay outs?


More than likely, it depends on the extent of the damage done.  No one is going to take money for a minor repair and vanish with it leaving their slightly damaged home behind and ruining their credit for a long ass time.  However, if you own a mortgage on a house that no longer farking exists, you might very well consider taking the money and running.  Even if contractually it is up to the home owner to keep the home livable, it strikes a cord in the 'not fair' part of the mind to realize that you're stuck paying for a house that no longer exists and don't even have a place to stay.  It's kind of like how the occasional person gets their car totaled in a hit and run and the car company is all, "Hey, you still gotta pay for that car that you can no longer drive...even while you're in the hospital...and it was no fault of your own...and it will financially ruin you."  Or the occasional home awarded to the spouse in a divorce where the other spouse still has to pay for it but can't actually live in it.  Or the occasional "We seized your house because your son had a joint in his backpack, we're going to sell it to fund our continued War on Drugs, and you've still gotta pay the bank for it."
 
2013-02-13 02:02:50 PM

IkonOlator: sethen320: You sound knowledgeable, but you keep misspelling a key word.

Actually, I tend to make things up as I go along,

If you're referring to my use of "mortgagee," you're mistaken.  If you're referring to "indorse" , you're also mistaken.

Oh, and if the lender won't indorse the check and party that has the money in the interim is the insurer (the drawer of the check) not the lender.

Ken


I stand corrected and it looks like I learned something today. Thanks.
 
2013-02-13 02:13:33 PM

jayhawk88: "Hey John, we got this $200 million in insurance payouts, right?"
"Right."
"How much money could we make with that if we don't pay it out for like 6 months?"
".....Ben, add another VP to your title and schedule a board meeting."


But, the banks can't deposit it either if the homeowner hasn't endorsed the check as well. Right now the cash is really still sitting in the insurance company's bank accounts and it won't move until both the banks and the homeowners have signed off on it.

The big hangup appears to be on the banks' part.  They have evaluated the damage and compare it to A) the costs required to repair the property and B) whether there is any property left to secure the mortgage going forward.  If all I have left is just a flushed out piece of land, the bank may demand that the mortgage be satisfied in full if the property cannot be restored to usable status with the funds provided.

A simpler observation may just be that the departments within these banks that handle such matters are not profit centers and are grossly understaffed in relation to the cases on hand.
 
2013-02-13 04:36:38 PM
As someone who has now waited over a *year* for his insurance payments because of a crappy bank such as these.... I'm getting a kick.

/but unfortunately, no insurance money as of yet.
//there should be major penalties for this kind of crap.
 
2013-02-13 04:38:49 PM

CptnSpldng: t endorsed the check as well. Right now the cash is really still sitting in the insurance company's bank accounts and it won't move until both the banks and the homeowners have signed off on it.


as an FYI for you... the banks *require* you to endorse the check after the insurance company sends it to you if you want them to further process it. -So, you really don't have an option with that sort of thing considering it's a 3 party check.
 
Ral
2013-02-13 05:49:00 PM
If this is money being paid out on an insurance policy that the recipient has, then the only people who have any right whatsoever to dictate how that money is spent are the policy holder and the insurance company (specifically, the policy contract).

No one else has any say in the matter, nor is it any of their business.

If we're talking about "free" money from the govt, then I think they should keep track of every cent and make sure it is spent appropriately.  That's MY money we're talking about.  The govt shouldn't be giving people any money for the disaster anyway.  If people were not insured, tough shiat.
 
2013-02-13 05:53:31 PM
That's farking grocery money to storm victims. Goddamn vampires.
 
2013-02-13 06:16:54 PM

Ral: If this is money being paid out on an insurance policy that the recipient has, then the only people who have any right whatsoever to dictate how that money is spent are the policy holder and the insurance company (specifically, the policy contract).

No one else has any say in the matter, nor is it any of their business.


Unless somebody else was a party to the insurance contract.  Mortgage lender might make that a condition to its lending.
 
2013-02-13 08:23:16 PM
200 Million is nothing to these people. It's a farking joke. Fark these banks and the people who run them.
 
2013-02-13 11:50:48 PM
Thus is funny; I have friends who are contractors. They agree with the home owner on a price, do the work and leave after they are paid. Insurance is HUGE for them. One of the partners is a roofer who can sell sand to the bedouin. After the last wind storm he sold $150,000 in roofs to home owners who really didn't need the work done, but he had the contacts in the insurance world to get the deals through. Word to the wise: make sure your house needs all of those repairs before you sign with the contractor. Getting a second opinion will piss off the contractor, but it is your premium, and if you think they are helping you out for the goodness in their hearts, I have a bridge in queens to sell you. Cheap.
/the contractors are relatively honest, but the roofer is a prick
 
2013-02-14 12:05:59 PM

BarkingUnicorn: Glancing Blow: The reason the insurance companies draw the checks payable to the order of both JH and the Mortgagee is because the Mortgage requires it, as does the insurance contract. After all, the house is Mortgagee's collateral and there is an obligation to repair the house (rather than take the money and move to the Bahamas, leaving the lender to foreclose on a rotted-out moldy shell worth zip).

Yes, I agree, but I think the money should be held in escrow at a third party, not providing float for the lien holder.

Escrow services don't work for free.  That would cost the homeowner a cut.

Could let the bank hold the money and assume responsibility for paying repair contractors promptly.  IDK if contractors would go along with that.


No they won't.
There is a ton of chump change to be made keeping the homeowner in the loop.
Insurance or bank directly dealing w contractors is a loser.
 
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