NEW ORLEANS (CN) – A federal class action accuses ABN Amro and 27 other mortgage lenders of illegally snatching payments from the Louisiana Road Home program, intended for victims of Hurricane Katrina. Among the claims are that attorneys who filed claims for the homeowners are not being paid.
Plaintiffs, led by the Law Offices of Joseph Bruno, seek declaratory relief in the disputes between various parties concerning the ranking of their alleged interests in Hurricane Katrina loss settlements.
The defendant mortgage lenders and the Road Home Program each claim ownership of home insurance loss payments, before homeowner receive the payments. The Road Home Program claims it is entitled to homeowners’ insurance checks, but acknowledges responsibility for payment of attorneys’ fees from the insurance money, the 35-page complaint states.
The defendant mortgage and lending companies deny an obligation to pay attorneys’ fees for the homeowners; they say the homeowners should pay the fees themselves.
The mortgage lenders claim that if Road Home wants reimbursement for its homeowner grants, the homeowners are solely responsible for the grant repayments. The plaintiffs claim that lenders are refusing to endorse insurance settlement checks, claiming that as the mortgagee and under the mortgage contract, they are an additional loss payee, and, as a result, they allege that they have ownership of the insurance settlement money.
This has a direct effect on homeowners, as without their insurance money, they are unable to repair their homes. Also, since the insurance claim checks have short payout periods, several million dollars in checks sitting in mortgage lending offices, waiting to be endorsed, already have expired.
Joseph Bruno represents the plaintiffs.
Here are the defendants: ABN Amro Mortgage Group, Accredited Home Lenders, Advance Mortgage Corp., Aegis Mortgage Corp., Altegra Credit Co., AMC Mortgage Services, American Acceptance Mortgage, American General Finance, American Home Mortgage Corp., American Home Mortgage Corp. of New York, American Home Mortgage Servicing,, American Thrift & Finance Plan, American Thrift & Finance Plan LLC, Ameriquest Mortgage Co., AmSouth Bank, Argent Mortgage Company, Associates Financial Services of America, Associates Financial Services Company, Citifinancial Mortgage Co. of New York, City Financial Services, Citywide Mortgage Co., Colonial Mortgage & Loan Corp., Corestar Financial Group, Countrywide Home Loans, Decision One Mortgage Co., Dryades Savings Bank, Louisiana State Division of Administration Office of Community Development, Suzie Elkins, Executive Director, and all others similarly situated.