2 LI lenders cited on slow Sandy settlements
Long Island-based lenders Astoria Federal Savings and Mid-Island Mortgage Corp. were named by state officials Tuesday as being among the 10 slowest banks to release insurance settlements to New Yorkers trying to rebuild after superstorm Sandy.
The banks and mortgage servicers on the state Department of Financial Services' "bottom ten" list are withholding from flood-battered homeowners 1,109 settlement checks statewide, totaling $41 million, officials said.
"The poorest-performing banks are lagging well behind the leaders and are holding back millions in badly needed Sandy aid," state financial services superintendent Benjamin Lawsky said.
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Insurance companies regularly issue large settlement checks jointly to homeowners and their mortgage lenders, which hold a portion of the money in escrow to prevent residents from walking away without rebuilding. Since Sandy, however, the practice has left thousands struggling to afford repairs.
Settlements held by banks peaked in February at $306 million and are now at about $220 million, officials said last week. On average, New York lenders are now holding 17 percent of the settlements they received. Those on the state's "bottom ten" list are holding 44 percent, officials said.
An Astoria Federal spokesman said, "We . . . recently adjusted our policy and release 75 percent of all insurance claim funds received."
Mid-Island president Louis Bottari said the bank was unfairly included on the list after being deluged with $1.2 million in checks over 10 days and expects to release $750,000 to homeowners by Friday. "This was strictly a timing thing," Bottari said.