Marshall Fire survivors say mortgage servicers are refusing to release insurance proceeds
More than a year after the Marshall Fire, many homeowners are still fighting for their insurance money.
Their battle now is with mortgage servicers; companies banks hire to manage loans. Fire survivors say they are refusing to release their insurance proceeds and, in some cases, making money off the proceeds while making recovery that much harder.
"It's sort of hard to get your mind around everything just, being gone, like, there's no record of my life anymore," says Chris Fuller, who had just finished renovating his Louisville home before the fire destroyed it.
He knew rebuilding would be difficult, but didn't realize just how difficult: "There are so many hurdles that we've all gone through from the very beginning, just in terms of taxes and insurance and the SBA. It just goes on and on."
The latest hurdle is maybe the most maddening yet. Like most fire survivors, was underinsured so he needs every penny of insurance money to rebuild, but all of the money is sitting in a bank account controlled by a mortgage servicer. When he asked for some of it, he says, they wanted proof of progress.
First, they asked for a letter. "Wrote a very detailed explanation of what we'd need and why," he said.
Next, he says, they wanted receipts: "Copied everything, printed out all these receipts from the surveyor, the city, the permit, and on and on and on."
Then, he says, they told him the house needed to be 25% complete.
"I said 'well, this is where we're at now. Can you explain to me what defines 25%?' And they won't. They can't," Fuller said. They are withholding all of the rebuild money and the problem we're going to come into real soon is, if we don't get this, what am I going to do to pay for materials? We've already paid for the windows. They don't count anything you've expended money on. It's got to be installed. We have had to use our contents money. That's not something we should have to or want to do."
He'd like to earn interest on that money, like his mortgage servicer, he says, is doing with his insurance proceeds.
"They're happy not to give any us money because - a year plus, a year and a half total probably by the time it's all done - will have made a good amount of money on what is hundreds of thousands of dollars. We need money now to be able to keep this going," Fuller said. "Unless, what do we have to take a loan out? Or take a second mortgage? No, we're not going to do that. We shouldn't have to do that. They are holding our money State Farm gave us from the fire loss to rebuild. Give us the money so we can rebuild."
Fifteen states require mortgage servicers to keep insurance proceeds in interest-bearing accounts. The same provision exists for federally backed-mortgages.
Colorado has no such law.
A spokesperson for Rep. Joe Neguse, who represents the burn scar area, says his caseworkers are trying to help. The Colorado Attorney General's Office said only that it was aware of the concerns.
