Thousands of Sandy Victims in New York have been forced to put off repairs to their damaged homes as they wait weeks for insurance checks, according to an investigation by the state's Department of Financial Services.
The state agency says more than 6,000 relief checks worth more than $200 million have been held up for as long as month.
The checks must be endorsed by both the homeowner and the homeowner's bank or mortgage servicer. According to DFS, this so-called "dual endorsement" is the main cause of the delays.
"It's a whole new set of red tape after working through the red tape with the insurance companies," DFS Superintendent Benjamin Lawsky said in an interview. "We've just really got to limit that and get this money out the door."
DFS has received hundreds of complaints. One refrain is that banks are requiring proof of repair work, according to the rules of federal mortgage agencies Fannie and Freddie Mac, before the checks can be disbursed.
The Cuomo administration sent letters Tuesday to the federal mortgage agencies Fannie Mae and Freddie Mac and the nation's four largest banks — Wells Fargo, Bank of America, Citibank and JPMorgan Chase — requesting changes to their policies.
The four banks account for more than two-thirds of the 6,000 delayed relief checks, or about $130 million dollars in assistance, DFS said.
As of early Tuesday afternoon, the banks and mortgage servicers had yet to formally respond to the letter from the Cuomo administration, according to a DFS spokesman.
Citibank said in a statement that it has already closed 87 percent of insurance claims in New York and is working as quickly as possible to settle its remaining insurance claims.
Amy Bonitatibus, a spokesperson for JPMogran Chase said in a statement, “We’ve dispersed more than $187 Million to homeowners to repair and rebuild their homes after Sandy. That’s 76% of all insurance funds. We also helped customers by waiving mortgage fees, creating a customer service hotline with extended hours, and allowing customers to postpone their mortgage payments.”
Delayed relief checks have also drawn ire in New Jersey where Congressman Frank Pallone met with Sandy victims Tuesday morning to highlight challenges facing residents filing claims with the National Flood Insurance Program (NFIP).
"These people are still living through a crisis and they are trying to put their lives back together," he said of the residents of Union Beach, NJ, in a statement. "The last thing they need is to be held up by bureaucratic delays."