They got their insurance money after Hurricane Ida. Now they are fighting their mortgage company. | Legislature


When Steve Kenny first received a check from his insurer for damage from Hurricane Ida, he thought he would finally have the money to repair his house in St. Charles Parish.

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 that an unknown website, InsuranceClaimCheck.com, would 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.

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

A spokesperson for LoanDepot declined to comment.

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

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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 about the quantity and the shelf life,” said Douglas Quinn, president of the American Policyholder Association, a consumer advocacy group. “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 in the last legislative session that would have entitled homeowners 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. Louisiana House’s second leader, State Representative Tanner Magee, a Republican from Houma, said he had faced his own frustrations in getting lenders to release his funds from assurance. 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.

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“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.

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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 I am poop that got flushed down the toilet and doesn’t come down,” said Kenny, 63. “I’m just going round and round and round and round.”

Galen Hair, with Metairie-based Hair Shunnarah Trial Attorneys, said the process is so complicated that her firm has two full-time staff 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 halfway without notice.

For those who aren’t backed by a law firm, the process can be downright maddening. Kenny spends his Fridays off 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 state’s Bureau of Financial Institutions, responsible for regulating lenders, can initiate an investigation if a consumer files a written complaint, Chief Examiner Michelle Jeansonne said. As a general rule of thumb, if the insurance proceeds are less than $ 40,000 and a consumer is up to date with their loan repayment, they shouldn’t have too much difficulty accessing their funds. she declared.

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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 products 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 new 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. “No one said this would 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 contact you.

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