One of my professors said, "Our nation will never rid itself of crime. It's too profitable of an industry." This same individual also taught that laws were written in favor of law breakers and many times it's the honorable, law abiding, tax paying citizen that's harmed after becoming entangled in the grips of corrupt system. Speaking of corrupt systems......Such is the case of many Houston homeowners
negotiating with lenders and insurance companies trying to recover from hurricane Ike. I've heard stories of some claimants who have called their insurance company and were issued blank checks for damages that never occurred. Then others, who actually sustained extensive damage have be treated like criminals.
Let me explain by using my latest client's situation as an example heretofore referred to as Mr.
Dahellup. Let's make Mr.
Dahellup's first name Fed.
I spoke to Fed prior to the storm. He owns two home in the same basic southwest Houston area. One home he uses as rental, the other as primary residence. Mr. Fed has or...had, great credit and has always paid both mortgages on time. Fed's primary home is worth $130,000 with approximately $90,000
remaining in liens against it. As for Mr. Fed's rental property, it has depreciated in value to approximately $55,000 due to foreclosures in the area. It has existing liens against it as well totalling $75,000 which actually makes it upside-down. Fed doesn't mind it's
diminished value though, because he has....or had, a tenant who was paying enough to cover the liens plus put a little cash in his pocket. Fed is completely content with paying off his debt. He's a hardworking, tax abiding, law abiding, believer in the free enterprise, U.S. citizen. Then came Hurricane Ike. Ike was a natural disaster no one could predicted. Fed's rental property experienced extensive damage.
Mr. Fed has always kept his insurance current on his property and his insurance company has always seem to be fair and honest so, he
wasn't really worried about repairs. To prevent his tenant from being displaced, Fed spent some of his personal cash while waiting on insurance claims to re-
imburse him for expenditures. Fed put a ding on his credit with a late payments on his rental property. Fed fell two months behind on his rental mortgage payment. Fed is about to learn a very costly lesson.....which is: "The quality of service rendered by insurance companies quickly diminishes after one needs to file a claim."
Rather than sending the money directly to Fed, the insurance company disbursed the check made payable to Fed and his lien holder. Fed forwards the check to his lien holder explaining that he has already spent some of the funds but needs to complete the work for the house to be habitable. Fed's tenant discovered that some of the water damage behind the walls are developing into mold making the house unsafe. Fed's tenant moves out due to health reasons. Fed's mortgage
servicer informs him that because of his arrears, they are not going to release the insurance check to him. Fed can't finish the repairs on his $55,000 home which has a $75,000 lien on it....
I received a phone call....... The individual on the other end of the phone
starts by saying, "Hi Mr.Green, I need your help selling my home." I say sure, I'd be glad to! I'm glad you called! Then I ask......"Who is this?" He says, "It's me, I'm
Fed Dahellup!".....
In these cases, no one wins..... all because of some clerk collector not looking at the whole picture.
Sure, I'll do what's best for my client. In this case probably a short sale in the amount of $40,000 will be in order. The sale amount needs to be low enough to excite investor money. Heck at that price I might even buy it. Mr. Fed's position is to just give it away to who ever wants it. He's tired of messing with them. I'm gonna personally go to bat for him and begin
talks with these crazy entities. Keep you posted.....
