Sandy Victims Face Hurdles Claiming Insurance Funds

Story by Stephen Bronner. 

Michael and Devorah Merwitz lost their entire first floor to flooding due to Superstorm Sandy, but they still say they are fortunate.

The Cedarhurst residents said they’re fortunate because, unlike many Long Islanders dealing with the issue of rebuilding their homes, the Merwitzes had the funds saved up to immediately start doing repairs. They have flood insurance and received a check, but have not been able to receive the funds — almost two months later — due to the back and forth with their mortgage company, Bank of America.

“It’s a rude surprise if you haven’t had the resources, and now they’re going to have to wait weeks until Bank of America pulls their finger up,” Michael Merwitz said. “I’ve heard other banks that have endorsed checks right away.”

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Many Long Island residents are struggling to rebuild their homes after the devastating storm, but those with mortgages have an extra hurdle to clear before being compensated by their insurance companies because the mortgage company must sign off on the check. Some mortgage companies have even asked for repairs to be done before the funds are released, which clashes with the fact that many contractors ask for payments in advance of doing work.

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“Check came made out to us and our bank, then our mortgage company forwarded a check made out to us for only some of the money,” Susan Petranek Walpole wrote on Wantagh-Seaford Patch’sFacebook page. “We must complete 90 percent of the work to get the rest of the funds released to us, which our mortgage bank is holding back.”

Assemblyman Harvey Weisenberg (D-Long Beach) said practices such as this have “resulted in a hardship for many families who lack the resources to pay for repairs pending reimbursement. It has also slowed the overall recovery process in my assembly district,” he wrote in a December letter. Weisenberg recently told Patch that banks and insurance companies “acknowledge the problem, but that doesn’t solve my problem.”

Sen. Dean Skelos (R-Rockville Centre) said he’s working with the governor and the state Department of Financial Services to help “families impacted by this storm … get their lives back to normal as quickly as possible.” He added that “If insurance companies and banks are intentionally delaying the release of funds to families impacted by Superstorm Sandy, that is totally unacceptable.”

The Merwitzes’ loan is held by Fannie Mae, and is a larger amount than Bank of America can endorse at one of its locations, according to Bank of America Spokesperson Laura Hunter. Their check had to be sent to California to be processed, but was again delayed because it lacked the endorsement of the “second lien servicer.”

Michael Merwitz said he met with a Bank of America representative that was sent to New York to deal with Sandy issues, who then handled the paperwork. He said any delay caused by the paperwork is an error on the bank’s part.

Still, Merwitz was reassured to at least get a response from Bank of America after weeks of silence.

“It looks like b****ing and moaning makes a difference,” he said.
Eddie January 16, 2013 at 07:14 AM
You may be aware, Joe, that banks following Fannie Mae and Freddie Mac gude lines require payments over $40,000 to be held in escrow accounts and released in installments as work progresses. The banks also regularly inspect repairs and make homeowners prove they are using licensed contractors. Most banks will simply endorse checks of lesser amounts over to mortgagees. That $40,000 ceiling was recently raised from $20,000, though some banks, like Morgan Stanley want to hold onto any funds over $10,000. It's all negotiable and somewhat understandable, as the banks want to insure that there is minimal loss in their collateral value.
Beachguy January 16, 2013 at 09:12 AM
The banks are the mortgagees . The borrowers are the mortgagors.
Patrick Smith January 16, 2013 at 09:28 AM
Where is flood insurance money we need to make a community lawsuit against flood insurance company for none payment and standing up to their agreement, my block in West end and is still empty where are all the families gone
Patrick Smith January 16, 2013 at 09:39 AM
This country has gone into a third world countrystatus with a 12th century administration mantality, impossible to get anything done,
Patrick Smith January 16, 2013 at 09:39 AM
This country has gone into a third world countrystatus with a 12th century administration mantality, impossible to get anything done,
Beachguy January 16, 2013 at 09:44 AM
I got it the first time Patrick.
Patrick Smith January 16, 2013 at 09:54 AM
Double tap
Eddie January 16, 2013 at 10:18 AM
Thanks, Beachguy for the correction. A bank would indeed be the mortgagee. It's the mortgagor who wants the insurance check to fix his house.
patricia ripley January 16, 2013 at 11:22 AM
I walked into the Bank of America on 7th ave around 38th street and they endorsed my $30,000. check right there on the spot. Of course then I had to send it to US Bank in Wisconsin (since they have not local branches) which took a week to endorse. Long Beach Strong.
toolittle January 16, 2013 at 11:42 AM
Anyone else get blocked from home insurance due to a 5% wind deductible ?
The real bear January 16, 2013 at 01:14 PM
Yes. Chubb sucks
Rachel January 16, 2013 at 02:12 PM
I had to send check to bank of america for them to send me part of the money back to start repairs due to the fannie mae conditions. They will require an inspection to release the remaining funds. But what i dont understand is my insurance adjustor told me i will get 80% of the replacement value but what i recvd was 1/4 of that and a letter stating if i need more i must send receits to prove that i need more money and then they will inspect again to determine if its warrented but not ithey r upgrades. Anything are upgrades from the depreciation value they gave. And who has thousands of dollars to layout and wait to see if they get it back.
Beachguy January 16, 2013 at 08:32 PM
Any kind of insurance for property is laden with all sorts of conditions, deductibles, language about depreciation, etc. Think of your car insurance. If you want to lessen your premium you buy a higher deductible on collision. That's what people are running into now. The insurers are very wary of writing policies in danGerous areas and the coverage is full of Safeguards for them. For example, regarding furniture. If a couch has a10 year life and it's 5 years old you are entitled to 50% of it's value. You don't get full replacement unless you buy and pay for it which most people don't . In fact the insurers usually don't want to make that kind of coverage available. If you think this stinks just wait until the dust settles and you try to get HO or flood coverage
Beachguy January 16, 2013 at 08:33 PM
The premiums are going to skyrocket and you're going to be offered less coverage.
Theresa Buonomo January 16, 2013 at 08:58 PM
Everyone is concerned about the boardwalk, instead of being worried about the residence of the "Lost City". Maybe, if the boardwalk is finished we can live under it for the summer. They could put up tents and we would still have the pleasure of living at the beach. Put Porto-Potties and rig up communal showers for us. It's so wonderful to pay tax increases and not be able to live in the house that's being taxed..God help us....
Patrick Smith January 17, 2013 at 06:20 AM
Hamburger January 17, 2013 at 09:31 AM
I like the communal showers idea
Leonard Bauman January 17, 2013 at 01:44 PM
I just got my tax bill and my Long Beach City tax increased more than $500 per year in the last 5 months. My house is flood damaged and worth a 1/2 of what it was worth and my taxes are up 33%. The City Council and City Manager must be terminated. Let us patchers run for City Council and appoint a fellow patcher as City Manager. Yeah!
Eddie January 17, 2013 at 01:46 PM
You noticed, eh?
Hamburger January 17, 2013 at 02:00 PM
taxes were going up regardless of who was in office -inevitable
Eddie January 17, 2013 at 03:35 PM
While the Republicans were in office in Long Beach, my taxes went down about 7%. My county taxes have been reduced about 18% since Mangano was elected. Republican too. Let's see -- isn't the Republican Congress fighting with Obama for spending cuts? I see a pattern here.
Hamburger January 17, 2013 at 03:43 PM
The Republicans were registered democrats.
Carly January 17, 2013 at 04:40 PM
I'm with Theresa. The city council's priorities are completely antithetical to the realities LB citizens are facing. LB has yet to request a hazard Mitigation grant from FEMA to assist homeowners with 75% of the cost to elevate their homes to ensure peace of mind, decrease their flood insurance bills and to stave off damage from future storms. The cost to LB is zero; however, we don't matter. The tourists, however, deserve a new boardwalk.
Carly January 17, 2013 at 04:40 PM
Vote them and their cronies OUT
Rachel January 17, 2013 at 05:53 PM
Why is my water bill the same amount when i gavent been able to live in my house in 3 months? Are they charging for the water that flood my house?
Beachguy January 17, 2013 at 09:01 PM
Time for a third party and/ or a new form of city government.
Patrick Smith January 18, 2013 at 06:12 AM
My new years resolution was to stop reading the patch .Guess I,m one of the 20 losers who still read this crap and comment on it .
Beachguy January 18, 2013 at 07:06 AM
Can't disagree Pat.
Hamburger January 18, 2013 at 07:49 AM
Y u no start follow New Years resolution


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