Hurricane Countrywide

One would think that insurance companies and mortgage companies would be among the hardest hit industries from a disaster such as Hurricane Katrina. Well, I have quickly learned another lesson about how big corporations get bigger by screwing over individuals. As impossible as it has been dealing with insurance providers following Katrina, my mortgage company, Countrywide, has made repairing the damage to my home nearly impossible.

I needed a new roof; my slate roof was damaged beyond repair due to Katrina. I narrowly missed being flooded and I can't imagine how those who were flooded and lost everything (instead of just a roof) are able to sanely deal with their mortgage company if they are being treated similar to the way I am. I have fought with my insurance for 7 months and still have not come to a resolution, however at least the insurance company has issued a check to me (which was approximately half of the replacement value of my roof according to contractor estimates) and fully admits that they are just overwhelmed. They sent out a second adjustor 7 weeks ago to update the claim estimate so they should get around to making me whole by about mid-summer. What a joke. But at least they pretend to care.

However, Countrywide Mortgage is involved in unfair and unusual business practices associated with processing insurance claim checks. When you have a lien on your home, the insurance company writes the check payable to the homeowner and the mortgage company and both must endorse the check. In my opinion, this is a good practice if your lender is reputable. It allows your lender to have some say in the process of making repairs and insures that their investment in the property is protected. If your lender is Countrywide it is a nightmare.

I finally received a substantial check from my insurance company on March 10th. I went to a local Countrywide service center as soon as I could after receiving my check, which happened to be March 14. The staff at the service center had me endorse the check, they took it and said they were overnighting the check to their offices in California for endorsement and the money would then be sent back to me. Sounded good, so I hired a contractor to replace my roof. It had to happen and I could not wait any longer. Well, little did I know that Countrywide lies every time you talk to them. They actually take the money, deposit it in a 'special' account and then refuse to give the money to you. Each time you call them they give you another story, a new requirement to meet, or more paperwork to complete.

The contractor completed the work on my roof in about 10 days after he was hired and did an excellent job. I felt obligated to pay him (Countrywide's unfair business practices are not his fault) and paid him out of my savings. Countrywide actually sent out an inspector 12 days ago and filed the inspector's report stating that the work on my house is 95% complete (basically agreeing that I paid for the repairs to my house from Katrina out of my own pocket). Countrywide has admitted to me that they have this report but then sent me more paperwork to complete such as a certification of completion that requires notarization and a waiver of lien to be signed by the contractors that worked on my house and also notarized! Everytime you get past a hurdle in this process with Countrywide they make up another one! I sent this to them and now they are still working on processing the paperwork.

The truth is this : Countrywide has had my insurance check (sent to me and Countrywide to complete the repairs on my home) since March 15. They have found numerous ways to keep that money in their 'special' account. I have been forced to pay for the repairs out of my own pocket, negating the reason I had insurance coverage in the first place. In the interim Countrywide has sent out their own inspector and confirmed the repairs are complete. So why does Countrywide behave in this way? Because they are making a tremendous amount of money on interest by holding individual's claim money for as long as possible. If the average Katrina claim check is $30,000 and Countrwide can keep 1000 of their mortgagor's checks in their 'special' account by slowly rotating money in and out of that account, they would have $30 million to invest and collect interest on. I fully believe that this is the explanation for their behavior and they are not able to demonstrate that they act in any other manner.

It is time for Charles Foti, our Attorney General, to file a lawsuit against Countrywide. No more threats, half-hearted investigations, or sucking up to big businesses. These business practices are unfair, individuals in Louisiana are being taken advantage of, and a California corporation is getting richer from our hardships.