Many victims of this summer’s flooding in Louisiana are still waiting for insurance payments thanks to federal red tape, according to a news report.
According to Louisiana CBS affiliate WAFB, many homeowners who had flood insurance have filed claims for damages to their homes, but are still waiting for their checks.
Derek Talbot, vice president of marketing for Louisiana mortgage company GMFS, said the company had about 800 customers with flood insurance who were affected by the disaster.
“Here we are almost in month four, and only half of those customers have received that final check from the insurance company,” Talbot said.
When a mortgage is involved, it’s not as simple as simply cutting a check to the homeowner when insurable damage occurs, Talbot told WAFB. Because there’s a lien on the home, a check is written to the mortgage company, “and then our job is to take that money and put it in escrow and disburse it periodically so that repairs can be made to the home,” Talbot said.
But because of federal regulations on the mortgage industry, Talbot said, mortgage companies have to follow very strict guidelines in disbursing the cash. The money can only be released to the homeowner a bit at a time for repairs — which can really complicate things if the home’s elevation needs to be raised, a common issue in flood-prone areas.
“The bottom line is, if you don't have the funds to do the repairs, it really complicates things a lot," Talbot told WAFB.
GMFS is currently working with state and federal officials to try to streamline the process and cut through some of that red tape for the future, WAFB reported.
"Louisiana had its share of natural disasters and quite frankly, we feel the play book should have been written a long time ago and could be better," Talbot said.
