Nearly $200M Meant for Sandy Victims Being Held by Banks, Cuomo Says

By Nicholas Rizzi on February 12, 2013 12:55pm 

 At least $200 million in insurance funds issued to Hurricane Sandy victims for repairs have been held by banks and mortgage servicers, Governor Andrew Cuomo announced on Feb. 12, 2013.
At least $200 million in insurance funds issued to Hurricane Sandy victims for repairs have been held by banks and mortgage servicers, Governor Andrew Cuomo announced on Feb. 12, 2013.
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DNAinfo/Catherine Nance

NEW YORK — Banks are holding onto more than $200 million in insurance checks intended for Hurricane Sandy victims, Governor Andrew Cuomo said Tuesday.

An investigation by the state's Department of Financial Services found that banks were not delivering the checks because they need proof of the damage, Cuomo said.

The check is issued to both the homeowner and their bank or mortgage provider, and the bank must endorse the check before the owner can get the money.

"After insurance companies have sent homeowners checks to pay for repairs, the money should not be sitting with the bank because of red tape,” Cuomo said in a statement.

“Banks need to use maximum discretion to get money into homeowners’ hands as quickly as possible.”

The DFS investigation found that, as of late January, 95% of servicers in New York were holding funds from 6,611 homeowners totaling $208 million, Cuomo said.

The four largest banks — Wells Fargo, Citibank, Bank of America and JP Morgan Chase — are holding 4,159 worth $150 million, Cuomo said.

Even though in December banks agreed to speed up the release of funds, they have been reluctant to release the money without verification of repairs, Cuomo said.

Storm victims have complained that insurance money has been too slow for some to carry out work needed before they can return to their homes, and the DFS has received hundreds of complaints, Cuomo said.

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