NEW YORK (Reuters) - New York Governor Andrew Cuomo called on the nation’s four largest banks on Tuesday to speed up payment of more than $130 million in relief to homeowners who suffered damages when superstorm Sandy smashed into the northeast coastline last October.
The state’s Department of Financial Services says hundreds of New York homeowners have complained that banks have been too slow to process paperwork or have placed too many conditions before disbursing funds.
While the banks have “substantial discretion” to release funds to homeowners who are current on their mortgages and in cases where damage was less than catastrophic, significant funding has been held up, Cuomo said.
“Families need to be able to return to their homes and the state economy, which took a hit from superstorm Sandy, needs the boost from spending on repairs,” Cuomo said. “After insurance companies have sent homeowners checks to pay for repairs, the money should not be sitting with the bank because of red tape. Banks need to use maximum discretion to get money into homeowners’ hands as quickly as possible,” he said.
Cuomo said Wells Fargo, Bank of America, Citibank and JP Morgan Chase are collectively holding more than 4,000 relief checks.
In a statement, a Citigroup spokesman said the bank was “committed to working as quickly as possible under the requirements of investors, insurers and others” to settle Sandy-related insurance claims.
Citigroup said it had closed approximately 87 percent of its insurance claims in New York and JP Morgan said it had dispersed 76 percent of its insurance funds.
Wells Fargo and Bank of America did not immediately comment.
Cuomo said his office has also sent letters to Fannie Mae and Freddie Mac seeking “emergency reforms” of policies relating to the release of insurance funds by banks and servicers. Fannie Mae and Freddie Mac’s rules say that banks may require proof of repair work before releasing funds, Cuomo said.
Reporting By Edith Honan; Editing by Cynthia Johnston and Dan Grebler