Action 9: Mortgage company holding money needed to fix wrecked home

DAYTONA BEACH, Fla. — Six months after Hurricane Irma, a Daytona Beach woman still can't move back into her wrecked home. The insurance company paid for repairs but now her mortgage company won't release the money.

Action 9's Todd Ulrich met April Lavan outside the townhouse she can't call home.

The hurricane had ripped off the roof, causing the ceilings to collapse. Months later, all major repairs are still on hold.

“Because my mortgage company won't give me my check back, that's pretty cut and dry,” said Lavan. She blames her lender, Ditech Financial, and claims the company is holding her insurance settlement hostage.

Her insurer wrote a $50,000 check but it required two signatures, Lavan’s and Ditech's, so she called the lender.

“We'll endorse it, cash it, and send your money back,” Lavan said she was told three months ago.

Lavan partially paid for a new roof herself and hired a general contractor, but she said getting Ditech's approval has been impossible.

She received a letter from Ditech listing all the documents it needs to release the insurance check. According to Lavan, they've done all of that at least twice.

Lavan says getting answers from Ditech has been impossible.

“Pretty much slapped in the face when you try to get your money back, which belongs to you," she said.

Mortgage companies are included on insurance settlement checks to guarantee it's spent on repairs.

But real estate attorney Karen Wonsetler told Action 9 that lenders can't delay the process, so consumers should send a demand letter. “I have done everything, I’m current on my loan, you have no right to withhold funds,” said Wonsetler.

Ditech Financial includes Green Tree Servicing, which paid a $63 million federal settlement for mistreating borrowers trying to keep their homes.

Lavan is recovering from hip replacement surgery and currently living with her brother. She wants this nightmare to end: “I want my home fixed and want to come home.”

Several days after Ulrich contacted the lender's corporate office, Lavan got a FedEx letter from Ditech including a check to cover initial repairs.

Action 9 has heard similar complaints about other lenders swamped with hurricane insurance repairs. Experts say unreasonable delays can be a breach of contract, so document every contact you have with the lender.

Ditech provided Action 9 with the following response:

"I understand you or someone from your team contacted the customer service area last week regarding an insurance payment for April Lavan of Daytona Beach. I did receive an update late yesterday that a FedEx envelope was mailed to the customer on Monday and was received yesterday with checks to cover roofing repairs and certain interior repairs."

Cox Media Group