Mortgage Company holding flood insurance refund

[Sialia]

What is the name of your state? Virginia

My mortgage company has been holding my flood insurance damage check hostage since hurricane Isabel. Repairs have been completed, but they continue to make excuses to delay remittance. Must I take them to district court (we are talking a bit over $5K) and is it my right to withhold my mortgage payments, instead depositing them into an escrow account until this is resolved? I have contractors that want their money now. Also, shouldn't they be paying me interest on this money that is essentially mine? This has been quite frustrating.
Thanks!
Tom

 

[HomeGuru]

What is the name of your state? Virginia

My mortgage company has been holding my flood insurance damage check hostage since hurricane Isabel. Repairs have been completed, but they continue to make excuses to delay remittance. Must I take them to district court (we are talking a bit over $5K) and is it my right to withhold my mortgage payments, instead depositing them into an escrow account until this is resolved? I have contractors that want their money now. Also, shouldn't they be paying me interest on this money that is essentially mine? This has been quite frustrating.
Thanks!
Tom

**A: and what excuses have they been making? Did you send a certified rrr letter instructing them to pay the contractor?

 

[Sialia]

They claim I don't get money (my money by the way since I pay insurance) until work is done (done). Cash goes to me...I am responsible for paying contractors. I have told them work is done (1 1/2 months ago). I have not sent them a registered letter at this time...but another month wait is not an option. At wits end here...and I will not speak with those people again.

Thanks for your response.
Tom

 

[HomeGuru]

They claim I don't get money (my money by the way since I pay insurance) until work is done (done). Cash goes to me...I am responsible for paying contractors. I have told them work is done (1 1/2 months ago). I have not sent them a registered letter at this time...but another month wait is not an option. At wits end here...and I will not speak with those people again.

Thanks for your response.
Tom

**A: Ok Tom, please tell us what your next step will be.

 

[Sialia]

I sent them an e-mail message saying I am considering legal action and that I intend to hold their payments in an escrow account until this is resolved.

 

[tigger22472]

Home Guru.. can I answer this one??? can I ? Can I?

 

[Sialia]

Just tell me I'm insane for fighting with this company!

 

[oberauerdorf]

Since I'm new here Tig I'll defer to you. But I know exactly what you're thinking...(wink...wink...)

 

[tigger22472]

You're not insane for fighting them but you are playing the game wrong. By withholding payments even in an escrow account you are risking losing your house. Now, Home Guru should be able to tell you the exact way to go about it. This may sound like a silly question but you've showed them PROOF that you have paid to have this all done... correct?

 

[Sialia]

Correct...but they are stalling on inspections (meanwhile gleaning more interest on my money). Why do they have advantage when it comes to me protesting their monatary practices (setting up escrow) when that is standard practice for renters????

 

[djohnson]

The reason holding your payments is not a good idea it because your mortgage agreement with them was not contingent on them paying you for the flood damage. A renter may have more leeway since that agreement also states the landlord has to maintain the structure to a certain standard. Even then they can't just automatically do it. There is procedure to follow. I understood in your first post that the contractors are still wanting to be paid, then later you state you paid them and are wanting reimbured. Which way is it? Who contracted the work? Did you go through the proper estimates and procedures to get the contractors approved?

You stated the work was done 1 1/2 months ago. How long has it been since you actually submitted all this to the insurance carrier? Also, I didn't really understand the reasoning they were giving you on why they haven't paid, can you elaborate please.