Major banks and mortgage servicers agreed to expedite home insurance claims payments to New Yorkers who suffered losses from Super Storm Sandy, Gov. Andrew Cuomo announced.
Insurance claim checks must be endorsed by lenders or mortgage servicers before homeowners with mortgages can cash them. The delays make it difficult for people to get their lives back in order.
"Homeowners need help now and that's why insurers are sending advance checks to meet their immediate needs," Cuomo said in a press statement. "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. 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."
The governor also announced that the grace period on mortgage payments was expanded for another three months. The additional time will allow residents affected by the storm to catch up on their payments without having to face collection agencies or a lowered credit score.
To expedite the signing of insurance claim checks, a dozen major banks and mortgage servicers agreed to immediately release any portion of insurance money designed for living expenses or the replacement of personal property, as well as any money in excess of the unpaid mortgage loan balance. They also agreed not to apply any portion of insurance or relief checks to mortgage payment arrears without the consent of the homeowner or a federally sponsored enterprise, such as Fannie Mae or Freddie Mac.
In addition, the companies will use as much discretion as they have to move insurance and relief money for home repair to homeowners and their contractors.
More information is available on the New York State Department of Financial Services website.
"The grit and stamina of homeowners along Staten Island's storm-ripped shoreline is astonishing, but they are weary," Margaret Becker, co-director of the Staten Island Legal Services' Homeowner Defense Project, said in a press statement. "The hard physical work takes a toll, but so does red tape. The department's advocacy and the banks' commitment to get insurance funds released quickly and give homeowners flexibility on their mortgage payments will help remove some of the burden for these people as they slowly put their lives back together."