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CitiMortgage / insurance dept withholding funds

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Contact information:
Flower Mound
On June 10, 2009 our home was seriously damaged by a severe storm. The total claim amount received by State Farm was $38, 000. We received the funds from State Farm, immediately sent the endorsed check to CitiMortgage as instructed since the check is made out to both us and our lender. I called CitiMortgage as soon as we received the check to follow their process. I went to their www.mylossdraft.com site as instructed by a recording to complete the necessary paperwork. The one page website was vague and lacking in clear information, but I printed the necessary forms, completed them, and called for further clarification. After finally reaching a person, I was given the web address again. I explained twice that I had the mental acuity to get that far but would like personal assistance and clarification. They provided none. I faxed the forms into the ether (no confirmation of receipt provided). I followed up later that day and was told it takes 48 hours to get a fax. This is where the stonewalling tactics began to become apparent. I asked about the process again, hoping another rep might help. She did give more information than the site (accidentally, I assume) and told me with multiple contractors to pay, I should complete the self-contracting form instead of the waiver of lien form. That form includes the following statement: "I (We) will be self contracting repairs to the property, and will provide paid receipts for material and/or sub-contractors used in completion of those repairs." 1. I had no choice but to complete this form since I had multiple contractors. 2. I said I would obligingly provide receipts upon receipt of the funds from CitiMortgage since I cannot pay $38K out of pocket. 3. I HAD to agree to this to get ANY of the funds from CitiMortgage. The rep said that was all understandable and fine. A week later, I had their required inspector out to confirm repairs. He confirmed and they acknowledged that 95% of the repairs had been completed. This step I understand as they have an obligation to ensure their collateral is at least worth the value of the loan. So this is completed, and according to their website, the remainder of funds will be released. That's not happening. After more than six more phone calls, they are insisting they need receipts from me showing I have paid the contractors. What? That's what the money is for, to pay the contractors. I even asked the automaton on the other end of the line if he (different unempowered call center employee every time) had $38000 lying around and if so, he can pay them, send me the receipts, and I promise I'd pay him back. Not surprisingly, he didn't get it. They are obviously trained to stonewall in order to hold on to the money as long as possible. Finally, I called the mortgage customer service department and after 3 tries, got a manager. She was seemingly helpful, but I was mistaken. I told her in no uncertain terms that I would cash out investments to pay off the loan and they could give up the possible hundreds of thousands of interest, or she could make a call to get my funds released. She made the call, got back on the line and GUARANTEED my money would arrive by July 16th. I got all the info, including her extension (if it's real) and a case number and said thank you. An hour later, I got a call from the insurance department demanding receipts again and explaining no funds would be released until they had them. I had the same, maddening circular argument to no avail. Since we had FINALLY received a third of the funds, I sent her a receipt from a contractor (this after sending two receipts prior - money paid out of our own pockets) showing that exact amount paid. She made all kinds of huff and puff about having to escalate for approval - again, obvious stonewalling - and I said I could care less. I said, "We have done more than is required by your documents and incomplete instructions and varying stories from different employees there. Your document does not in any way legally bind me to pay contractors and provide receipts BEFORE you send me MY money. It does not state a contingency for release of my funds to me. It does not state a specific percentage or number of receipts (by the fourth call, they were saying 100% and/or 50% of the amount of the repairs according to whom I spoke with. Blatant lies spoken as absolute truth without any supporting documentation.). I do not owe you anything based on your own documentation other than two paid receipts, and even then, I don't owe them to you before you send me the funds. You do owe me my money. Your inspector already confirmed the repairs are complete and your concern in this is alleviated. You have no right to continue to hold my money to earn interest and to bolster your reserves, which is obviously what you are doing. Have I made myself perfectly clear?" She said, "yes" and that the funds would be released upon receipt of the fax (again, 48 hours with no follow-up). That's the third time someone has "guaranteed" that and I have no reason to believe them. In the meantime, I have contractors who deserve their money. What recourse is there? It is obvious that their arrogance makes them feel entitled here as illogical as it seems. It's a scam, plain and simple. It is obvious to any thinking person they are holding homeowners' insurance funds for their own use. It is blatant thievery. What miniscule power do consumers have in such an oligarchy?


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A  8th of Aug, 2009 by 
Agree Disagree 0 Votes
the federal goverment should require mortgage companies to release funds in a timeley manor. if tax dollars are used to keep them in buisness. as an insurance contractor i chose insurance claims that i will acept by who holds the mortgage, as i have had funds held for six to twelve months before they would pay me for a job that was 100 percent complete.as a small buisness man i can not support multi-million dollar companies out of my pocket.There is no bailout for my buisness if i go broke supporting others who mishandle theirs
A  15th of Sep, 2009 by 
Agree Disagree 0 Votes
It should be illegal what they are doing to homeowners - we had the same situation. On July 22, 2009, our kitchen flooded, damaging our wood floors. State Farm immediately issued us a check for the repairs (approximately $15, 000). Wells Fargo Bank has done everything in their power to hold on to our money as long as possible. We have had to pay most of everything out of our own pocket and haven't received a dime yet even though our job is 100% complete. Inspections keep getting mysteriously canceled, errors keep being made by the Bank, or they keep requiring additional documentation. It makes me wonder what would happen if we didn't have the money to do the repairs. How long would they hold on to our money then? And why should they have the power to determine what we put in our house and who we contract with for the job? They don't pay for the insurance, we do!
A  15th of Sep, 2009 by 
Agree Disagree 0 Votes
Thank you for your comments. I did get my issue resolved - eventually. It took countless hours of tenacity, calling every number I could find for CitiMortgage and demanding to speak with someone who had the power to get us our money, filing complaints with the FTC, the TX AG, the TX Insurance Commission, the BBC (waste of time, really), and other agencies.

If you have the time, please pester everyone. We are fortunate enough to be in a position to handle the problems, but many people are not. While we all deserve fair and honest treatment, it's especially important that we bring this to light and demand regulations and enforcement for the people who don't have the time, money, and resources to fight back. The huge banks need to be put in their place before we're all screwed.

Go get 'em and best of luck to you.
A  6th of Nov, 2009 by 
Agree Disagree 0 Votes
I am having the same trouble with Citimorgage right now.has been 1 month and promises and lost paper work & still no check & no repairs done, we all need help to stop them
A  22nd of Sep, 2010 by 
Agree Disagree 0 Votes
I have been with Citi for many years and have some insurances with them. My payments are made on time, but every month I receive a letter that certain policies are a month behind. I contacted the companies and they are said that the policies are up to date. I have call Citi and the are saying that the policies are behind. Back in 2005 I missed one month payment and the policies that I have now was not on the loan.
A  19th of Oct, 2010 by 
Agree Disagree 0 Votes
I am having the same problem with CENLAR, which is actually Freddie Mac. They are refusing to release the money required to pay the contractor, which is a large company and requires money upfront...I can not start repairs without the money and they refuse to contact me...looking to get an attorney and file with the hopes of forcing them to pay not only the funds to repair the property but pay the lawyer fees for any legal action to recover insurance monies.

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South Dakota
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