Mortgage Company

What is the name of your state?Kentucky
My homeowner's Insurance Co.paid the Mortgage company for a fire loss that i had , ( Mortgage company Lien Holder).
I brought in a contractor to do the repairs. The contractor received his money from my Mortgage company but DID NOT do his work! I am aware of that fact that the Mortgage company should have INSPECTED the repairs before releasing funds to this Unscrupulus Contractor.
Does anyone know of any case law where the Mortgage company was held accountable for this type of goof up.

Any help is appreciated.

Cad

cadkhoda said:

What is the name of your state?Kentucky
My homeowner's Insurance Co.paid the Mortgage company for a fire loss that i had , ( Mortgage company Lien Holder).
I brought in a contractor to do the repairs. The contractor received his money from my Mortgage company but DID NOT do his work! I am aware of that fact that the Mortgage company should have INSPECTED the repairs before releasing funds to this Unscrupulus Contractor.
Does anyone know of any case law where the Mortgage company was held accountable for this type of goof up.

Any help is appreciated.

Cad

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**A: yes, but you are saying that you absolutely had no say each and every month when the contractor submitted his construction progress draw payments to the mortage lender even after conducting your monthly construction inspections?

Yes, Thats exactly what i am saying... In fact, the inspection was done between the Mortgage Company and the contractor , with me being completely out of the loop.

cadkhoda said:

Yes, Thats exactly what i am saying... In fact, the inspection was done between the Mortgage Company and the contractor , with me being completely out of the loop.

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What did the mortgage company say when you asked them these questions?

The Mortgage company have said many different things, one was, they would have an attorney represent me in a case againts the contractor, ofcourse , i am yet to be contacted by a legal representative. One of the other things the Mortgage Company is saying is"that i hired the contractor , therefore i am responsible" . The interesting thing here is the fact,that Contractor drew his money from the Mortgage Co.

cadkhoda said:

The Mortgage company have said many different things, one was, they would have an attorney represent me in a case againts the contractor, ofcourse , i am yet to be contacted by a legal representative. One of the other things the Mortgage Company is saying is"that i hired the contractor , therefore i am responsible" . The interesting thing here is the fact,that Contractor drew his money from the Mortgage Co.

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**A: and what has your position been and what did you communicate to the lender during the ENTIRE course of the numerous months of construction?
Did you ever notify the lender via certified mail to Stop Funding?

Lender was notified Numerously, Via phone only.

cadkhoda said:

Lender was notified Numerously, Via phone only.

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Oral notifications are not effective and don't count.

Are you telling me i have an up hill battle?!!!

Virtually any time you must file a complaint, you have an uphill battle. Even when you are clearly an innocent party, you have an uphill battle.

The mortgage company holds "your" money in their escrow or trust account. They hold a note and an equitable interest in these funds and your real estate. None-the-less, you are owed a fiduciary duty by the mortgage company with regard to the management and disbursement of these funds.

I will assume, since most morgage contracts do not address this, that your mortgage contract contains no language that addresses the disbursment of insurance proceeds. This is because they don't need to. They are already listed as additional insureds under the contract which requires the insurer to include the mortgage company as loss payees up to the extent of their insurable interest in your property.

This becomes a problem any time you hire a fire & water damage contractor. They want to deal with the insurance company and the mortgage company only. Under these circumstances they direct bill the insurer, submit supplemental claims to the insurer and negotiate their progress payments directly with the mortgage company morons. The mortgage company could give a rats ass about you. They only care that the proceeds of the insurance setlement are reflected in the value of your property. It is up to you to make sure that the standard of workmanship was acceptable. By the way, what I describe here is what happens ALL THE TIME. It is not intended to reflect what SHOULD happen.

Your phone calls and letters don't often stop this process. You are dealing with $8.00/hr people in a call center that dispatch independent inspectors to review the work of the contractor. These people cannot do anything that is not defined on a screen in front of them.

You have a claim against the contractor and the mortgage company. You should leverage the mortgage company into chasing the contractor. By the way, the contractors CGL Policy will not address the issues you describe. A CGL is not a performance bond. Many consumers mistakenly beleive that a CGL policy protects them from contact disputes and ..up work. Wrong!

This should at least give you some perspective on the matter. Keep in mind the statute of limitations in your jurisdiction.

Claimlaw

Thanks a whole bunch for your input.

Mortgage company

Hello again ,
Does anyone know where i might be able to find out about the reponsiblities of the Mortgage company in my situation.... if what i am having here is Federal law guidlines that states that "Mortgage Company has a duty to inspect the repairs before releasing funds" or something in that General term..... Please advise me as to where i can look the info up.

Thanks again and god bless.

Cad

Q: Please advise me as to where i can look the info up.

A: Start by reading the mortgage.

This thread show why due diligence is the requisite. People act as if its someone else's problem when they drop the ball. Then they look to us for the magic bullet.

Amazing.

2 Bagger

I feel the purpose of the thread is to educate /inform ,some of us who are not as knowledgeable .