By Dow Jones Business News, March 19, 2013, 07:46:00 PM EDT
By Erik Holm and Andrew R. Johnson
New York Gov. Andrew Cuomo Tuesday identified 10 lenders and mortgage servicers that are holding $40.7 million in
insurance-claims checks meant for victims of superstorm Sandy.
The governor warned the mortgage companies--mostly smaller players and regional firms--they need to speed up the
disbursement of the funds to help homeowners rebuild from the Oct. 29 storm.
The broadside is the latest in a series of moves by Mr. Cuomo and state banking regulators to free up insurance funds
meant to pay for Sandy-related repairs. New York officials in February said the state's four largest banks--Wells Fargo
& Co. ( WFC ), J.P. Morgan Chase & Co. ( JPM ), Bank of American Corp. ( BAC ) and Citibank Inc. ( C )--were holding $131
million in checks, and later got national mortgage lenders Fannie Mae ( FNMA ) and Freddie Mac ( FMCC ) to reduce
restrictions that had slowed the release of funds.
The state said the larger companies are now disbursing funds more quickly, and the 33 largest banks and servicers are
holding back only 17% of the Sandy insurance claims they have received on average. But the 10 companies identified
Tuesday are holding 44%, regulators said.
Insurance claims are often paid jointly to a homeowner and their bank or mortgage servicer, and require the mortgage
company to endorse the check before the homeowner can access the funds. Typically, mortgage companies require proof that
the funds will be used to pay for repairs, or that the repairs have been made.
The financial company withholding the highest amount in insurance claims is a residential mortgage firm called Selene
Finance, the state said. The Houston company is holding on to $1.87 million, or nearly three-quarters of the Sandy-
related claims meant for its customers, regulators said.
Others cited by New York officials include Select Portfolio, which the state said is holding 56% of its Sandy claims,
or $4.9 million; Astoria Financial Corp. ( AF ), at 48% and $3.7 million; Capital One Financial Corp. ( COF ), at 45% and $
3.7 million; and Nationstar Mortgage Holdings Inc. ( NSM ), at 44% and $6 million.
Representatives for Capital One and Astoria said the companies had recently adjusted their policies to accommodate
Sandy victims waiting for insurance checks.
A Capital One spokeswoman said the state's figures were out of date and the bank was now retaining about 22% of those
Nationstar didn't immediately respond to a request for comment. Representatives for Selene Finance and Select
Portfolio couldn't be reached.
Write to Erik Holm at Erik.Holm@dowjones.com and Andrew R. Johnson at Andrew.R.Johnson@dowjones.com
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