New York Gov. Andrew Cuomo announced Wednesday that major banks and mortgage servicers will take action to expedite insurance payments to New York homeowners in the wake of Superstorm Sandy.
Currently, insurance claim checks must be endorsed by the banks or mortgage servicers before homeowners can cash them, causing “frustrating delays” at a time when the money is needed for home repairs or for living expenses, according to the governor’s announcement. These new actions will enable the insurance companies to get the money to homeowners faster.
The New York Department of Financial Services said it received numerous complaints from homeowners that servicers and banks have been imposing unusually stringent requirements before they will sign the advance checks. This has been causing serious problems for many families who desperately need their insurance money both to live and to start making repairs, according to regulators.
The new measures will allow more homeowners to receive their advance money promptly, regulators said.
Gov. Cuomo: ‘Homeowners Need Help Now’
“Homeowners need help now and that’s why insurers are sending advance checks to meet their immediate needs,” said Gov. Cuomo.
“Any delay in making these types of critical home repairs can mean the difference between a family being able to live safely in their home or remaining needlessly displaced for weeks or even months,” he said.
“I want to thank these banks and mortgage servicers’ for partnering with us and I call on all other banks and servicers to meet the standard set by their competitors.”
Benjamin Lawsky, superintendent of financial services, said, “Insurance payments are an essential part of people rebuilding their lives. We will continue to do everything we can to see that claims are processed promptly and homeowners and businesses receive all funds due to them so they can recover. It is good to see these banks and servicers stepping up to the plate to try and speed our state’s recovery.”
Gov. Cuomo also announced that the grace period on mortgage payments has been expanded for another three months. He said the additional time will allow New Yorkers affected by Sandy to catch up on their payments without having to face collection agencies or a lowered credit score.
Participating banks and servicers are:
• Bank of America
• Citi Mortgage
• JPMorgan Chase N.A.
• Wells Fargo Home Mortgage
• Apple Savings Bank
• Dime Savings Bank of Williamsburg
• Emigrant Savings Bank
• Homeward Residential
• M&T Bank
• New York Community Bank
• Ocwen Loan Servicing
Banks and servicers are required to follow different rules imposed by Fannie Mae, Freddie Mac and investors who own mortgage backed securities. In general, as a result of discussions with the Cuomo administration, institutions are offering the following types of relief:
• The banks and servicers will now use as much discretion as they have under the rules to immediately move home repair funds to homeowners and their contractors.
• Banks and servicers will immediately release any portion of insurance or relief funds designated for living expenses or the replacement of personal property and will immediately release any funds in excess of the unpaid loan balance.
• If living expenses and personal property amounts are not itemized in the insurance or relief payment, banks and servicers will request that the insurer provide an itemization and will promptly release applicable funds.
• Banks and servicers will not apply any portion of an insurance or relief check to mortgage payment arrears without the consent of either the homeowner or a federal government-sponsored enterprise such as Fannie Mae or Freddie Mac.
Details may vary from institution to institution and are subject to investor and regulatory requirements. Borrowers should contact their individual banks or mortgage servicers for specifics.
Was this article valuable?
Here are more articles you may enjoy.