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When you have an insured loss over a certain amount, the insurer will write the check to both you and the lender.  Now comes the hard part, getting the money out of the lender.  I recently had to go through Bank of America’s property claims process, it was full of mistakes and frustrations.

Basically here is how the process works.  You get a percentage to get the rebuild job started.  And then you request an inspection.  Based on the inspection results, more money will be released to you.   And so on, until the job is 90% done and they release the rest of the money.  Here is what to expect based on my experience:

  • Expect lengthy delays in every step of the process.   For example it takes 2 days for a check request to be “approved”.  I was also told I would have a check by a certain date, it showed up 3 days later.
  • You will need to shepherd every single step.  For example, don’t expect that an inspection automatically generates a check to you, in most cases you have to call and request the check.
  • The amount of money that will be released to you is unpredictable and based on the inspection.   A draw schedule that I sent in was pretty much ignored.
  • Ask to have the process explained several times.  I got a different story from each rep I talked to, one told me it took 2 days to schedule the inspection, the next time I called in asking why the inspection hadn’t happen, I was told 3 days.
  • Expect lots of mistakes.  The first check sent to me was sent to an old address (even though my loan statements had been coming to my new address for 18 months).  A canceled check’s funds was not returned to the account.  And most baffling of all, the first check was made to a second party even though I am the only party on the loan and the title!

The process was totally unworkable for any realistic construction schedule, especially one that had roof work and the corresponding worry of completing that particular work quickly.  What I had to do was fund the work up front and then work with the bank to get my money out of them.   I can’t imagine what it must be like for a property owner with no resources.

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