Asbury Park Press, N.J., David P. Willis column [Asbury Park Press, N.J.]

Jan. 19--Oceanport resident Eileen Hampton had an insurance check for $73,034, but there wasn't much she could do with it.

She certainly couldn't use it to pay the workers toiling in her gutted house on Port Au Peck Avenue. Nope, it wouldn't put money in her bank account for those doors or the kitchen cabinets or counter tops either.

She did have her savings, borrowed money from family members, an emergency disaster loan from her company, and a $35,000 advance from her insurer, New Jersey Manufacturers Insurance Co.

With the costs to repair her home, which was flooded with more than a foot of water from a nearby creek during superstorm Sandy, north of $106,000, she really could use the money from that check.

But first, she would need Bank of America to co-sign it. Bank officials wanted her to send them the check, and they would send her the money in pieces, like a construction loan.

"The problem with this scenario is that so much time has elapsed, bills have been incurred, money borrowed from family members and work has progressed that the funds are needed now, not according to their schedule," said Hampton.

Sound familiar?

It's a likely scenario for anyone who has an insurance check in hand to pay for their home's repairs and rebuild from Sandy.

Press on Your Side wrote about what's happening two weeks ago in a story about Barry Intintola of Toms River. Wells Fargo kept him waiting while he was trying to get the bank to co-sign his check.

Since then, calls and e-mails have come in with similar stories from homeowners who said they have maxed out credit cards, tapped friends and family for loans, and used up their savings to start the rebuilding process.

"We need all the money," Brick resident Virginia Veldkamp said. Veldkamp and her boyfriend John Pascoe wants Wells Fargo to release all the money from insurance checks for $65,646 and $13,000 so they can complete repairs on Pascoe's home. "We don't need it in bits and pieces."

Press on Your Side brought Hampton's and Veldkamp's story to Bank of America and Wells Fargo.

It's important to note that banks are co-signers on insurance checks because they hold the mortgage on a house. After an emergency disbursement from an initial check, banks are doling money out as work progresses.

Industry experts says it's meant to ensure that repairs are completed. It also protects the bank's or mortgage investor's investment in the house, the mortgage.

Bank of America spokeswoman Laura W. Hunter said the bank, which services mortgages, must follow the guidelines of the mortgage investor that owns the loan.

In the case of Hampton's mortgage, the institution that owns it is Fannie Mae, the government-sponsored mortgage finance company, Bank of America spokesman Richard G. Simon said.

To accommodate the needs of those impacted by Sandy, Fannie Mae allows for the bank to release as much as $40,000 from checks that are larger than that for emergency needs, Simon said. (Hampton's initial $35,000 insurance check was signed at a bank branch in November.)

"The final payment cannot be made until the repairs are near completion and the work is inspected," Simon said in a statement to Press on Your Side.

Hampton had contacted Bank of America about having officials at a bank branch endorse the check rather than mailing the check to the bank's property claims department.

Simon said an expedited inspection was ordered for her property. "Ms. Hampton has been advised of the need for additional required documentation, and once it is received, the banking center can be authorized to endorse the check in its full amount."

Soon afterward, Hampton sent in the paperwork and was told she could go to a local bank branch and have her second check signed for the full amount.

A little over a week ago, Hampton deposited her check immediately after it was endorsed by a bank officer. "Wasn't taking any chances," she said.

"I understand this storm was unprecedented and the banks needed to establish policies and procedures to protect their interests but they also need to make sense," Hampton said. "Bank of America tells me they need to protect the interests of those invested in my property.

"Well, I am currently living in a cramped apartment with my son and the family dog, and I don't think there is anyone more vested in making this property livable once again than me."

Bank of America's Hunter said the bank is determined to process claim checks "as quickly as possible" and has increased the number of bank employees prepared to help customers.

"Bank of America is sympathetic to the needs of customers whose homes were damaged by Sandy," she said in an email.

Doling out insurance money can make it hard for homeowners to complete the repairs. How can someone get their house to 80 percent completion or better if the money's not there?

In Pascoe's case, Wells Fargo initially released $35,000 a week ago in a check from the bank, Veldkamp said.

She expected another $22,000 on Saturday.

Veldkamp said Wells Fargo will not release the rest of the money she and her boyfriend need, about $24,000, until the house is 95 percent complete, inspected and certified to be mold-free.

"They want us to get to 95 percent with only 66 percent of the money," Veldkamp said. "How do we get there?"

Wells Fargo Home Mortgage spokesman James E. Hines said the bank granted an exception for Pascoe, allowing him to receiving 50 percent of the money without providing all the necessary documents.

The bank's practices are used by large lenders across the country, he said.

"Wells Fargo has procedures that we following when handling insurance claims," he said. "These protect the customer and the investor by ensuring the work gets properly completed. Our goal is to avoid paying for unsatisfactory repair work or work that may never be finished."

For Veldkamp, it has been a difficult, nerve-wracking process. For instance, paperwork has been faxed to Wells Fargo three times, she said. "A week later, they are still saying they didn't get certain forms from our contractors."

Do you have a consumer problem that needs solving? The Press is on your side! Contact business writer David P. Willis and he will try to help. Reach him at 732-643-4042 or pressonyourside@ njpressmedia.com or facebook.com/ dpwillis732.

___

(c)2013 the Asbury Park Press (Neptune, N.J.)

Visit the Asbury Park Press (Neptune, N.J.) at www.app.com

Distributed by MCT Information Services