Lenders hold back Sandy funds, draw Cuomo’s ire
Governor Andrew Cuomo called out a group of 10 mortgage servicers and lenders that are holding up nearly $41 million in insurance claim checks designated for Hurricane Sandy victims, the Wall Street Journal reported. The governor stressed that issuing these checks needs to be sped up in order to help these homeowners rebuild.
The mortgage companies are generally regional lenders, such as the Houston-based Selene Finance and Select Portfolio. Selene is currently holding on to nearly 75 percent of its Sandy claim funds, worth $1.87 million, while Select is holding back 56 percent of claims, worth $4.9 million.
Closer to home, Astoria Financial Corp. has about $3.7 million in insurance claim checks, Capital One Financial Corp. has $3.7 million and the servicing giant Nationstar Mortgage Holdings has $6 million. In each case, the totals represent close to half of the funds each lender is set to disburse.
Capital One and Astoria Financial representatives told the Journal that their companies made recent adjustments to Sandy victims who are waiting for checks. A Capital One representative told the Journal that the governor’s figures are dated, and that they are only retaining 22 percent of the value of the claims. Nationstar did not immediately respond to the Journal’s request for comment and Selene and Select could not be reached.
In order for insurance claims to be paid, the lender must endorse the check before the homeowner can access the funds, the Journal said. [WSJ] —Zachary Kussin