Colorado lawmakers take up bill to help Marshall Fire survivors whose lenders are holding insurance proceeds hostage
More than two years after the Marshall Fire decimated over 1,000 Coloradans' homes, some of those homeowners are still fighting for their insurance money.
They say mortgage companies are holding the proceeds and even making interest off the money.
Now, state lawmakers are stepping in with a bill aimed at helping fire survivors like Pietro Simonetti, whose situation is so maddening it's a wonder he hasn't lost his mind after losing everything he owns: "From the very beginning we thought the hardest part was going to be the insurance."
But it's what happened after he got his insurance check that's hard to wrap your mind around. He signed it, sent it off to his mortgage company, and waited for the money that would allow him to rebuild his life.
It never came.
"The bank's position was, 'because our name is on the check, we're basically taking this money, these funds, and putting them in an escrow account,'" Simonetti said.
He says his $650,000 -- almost double what he owes on his mortgage -- sat there for a year and a half earning the mortgage company interest.
State Reps. Kyle Brown and Judy Amabile, who represent the Marshall Fire burn scar, plan to stop the madness.
"Our community has really been on a journey and every step, that have been barriers for people to overcome," Brown told the House Business Affairs and Labor Committee.
He and Amabile introduced a bill requiring mortgage companies to give homeowners a third of their money upfront and provide a detailed disbursement plan for the rest. They couldn't keep more than homeowners owe on their mortgage and would have to pay the interest on what they do keep.
Simonetti says he finally got some of his money after lawyers got involved. But he says his lender won't release the rest until his house is finished: "So now we are scrambling to find that money. We applied to (the U.S. Small Business Administration) to see if SBA can come in and cover that gap."
The Colorado Mortgage Lenders Association is not opposing the bill. If it becomes law, the bill will help homeowners going forward but it's not retroactive, so lenders will be allowed to keep the interest. It passed its first committee unanimously.
