Tony Kono, a public-relations executive, experienced this problem after the flooding of his Jersey Shore dream home in Brick, New Jersey, after hurricane Sandy hammered the East Coast in October 2012. They had to live without power and heat for 11 days. When the electricity returned, he received $7,500 to pay the contractors for emergency repairs. However, when he started receiving the balance of his $85,000 claim, they took the check, which had his name and their mortgage holder's name.
TD Bank would not accept the check because a Weichert Financial representative had to endorse it. However, walking into their local branch office would not work. They had to mail it to Zurich, Illinois, where their mortgage correspondence comes from. After he sent the check, he found out that the bank had received his check, but they would not return it to him until they received an estimate for the repairs. Kono, along with other victims of Hurricane Sandy, were tripped up by a clause known as the Mortgagee Clause. The mortgagee clause lets banks take control of the insurance cash and require a representative to sign the claim.
Ultimately, this clause guarantees the rights to the entity that lends the money for the property over you. You have to understand this clause to understand who has the legal right to financial reimbursement. Kono considers himself lucky because he had the money to weather the financial storm, but he shudders to think what would have happened if he had not had the money like many homeowners in this position.
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