Consumer complaint received 2022-12-05
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — 
Company: Freedom Mortgage Company (VA)

I write to you today humbly requesting your assistance. In XX/XX/2021, our home suffered flooding in the basement. In XX/XX/2021, the company performing flood remediation repairs negligently caught my house on fire. It was a catastrophic loss, and my family has been displaced from our home since that time. Luckily, our insurance company, XXXX, promptly approved our claim and has been assisting us with rebuilding our home. However, our mortgage company, Freedom Mortgage, refuses to release the insurance funds that would enable us to complete the repairs on our house. 
As you may know, mortgage companies are included as a loss payee on insurance claim checks. This is to ensure that the mortgage companys financial interest in a home is protected. As such, when an insurance claim check is issued, the mortgage company is required to sign the check in order for funds to be dispersed and repairs to begin. However, there is no national standard by which a mortgage company must issue the funds. As an example, some mortgage companies require a copy of the repair estimate to be transmitted before releasing funds. 
Freedom Mortgage has received the depreciated cash value ( DCV ) of the insurance payments totaling roughly {$330000.00}. The actual cash value of the insurance claim is {$480000.00}, a disparity of approximately {$150000.00}. Instead of releasing funds based on the XXXX, they are basing the release of funds on the XXXX. XXXX will release the final funds after final invoice has been sent to them. 
What's more, I received a written email on XX/XX/XXXX from an escalation supervisor by the name of XXXX XXXX explaining that when I reached 95 %, I could simply give a verbal acknowledgement and they would release the remaining funds. Based on this guidance, I purchased everything required to finalize the house from my own pocket, but my contractor has had enough of Freedom Mortgage and refuses to complete the repairs until the money is released. He already has to financially outlay enough get to final invoice before he can submit for final invoice to XXXX. 
Freedom Mortgage 's lack of transparency, delay tactics, and bad faith has persisted over the past 19 months that my family and I have been displaced from our home. As background, we have never missed a mortgage payment, nor have we ever been late making a mortgage payment. We are not seeking any financial assistance in making my mortgage payments. I am a XXXX XXXX XXXX veteran and my wife has been a civil servant for most of her career. We work hard and are only seeking assistance to access the funds that are rightfully ours to rebuild our home.

As a stalwart defender of consumers, you may be interested to know that this is a national issue that has impacted many families. Mortgage companies have refused to issue funds to homeowners following hurricanes in Florida and Louisiana. In response, some states have clearly delineated requirements by which a mortgage company must operate in their code. As an example, Texas code states that a lender must notify the insured of each requirement with which the insured must comply for the lender to release the insurance proceeds. To my knowledge, Virginia, our state of residence, has no such protection for consumers. 
Any assistance you could provide to me and my family would be greatly appreciated. 
Having your house catch fire is an enormous trauma and fighting every day to get funds- which have been issued to me and are rightfully mine- to rebuild my home only adds to this trauma. My XXXX children have been living in a hotel for the majority of the past XXXX years. My daughter took her first steps in a hotel. My son started kindergarten living in a hotel. I can not undo the trauma my children have experienced over the past XXXX years, but I can try to ensure other children are not victimized by large mortgage lenders trying, seemingly, to pad their books by keeping as much money on their ledgers as possible. 
We have tried to remedy this through various means, both internally and externally. To date we have been met with only roadblocks. I have attached a response letter from the XXXX  complaint where they tell me to get more money from the insurance company. They don't have a contract with the insurance company, we do. They don't have a contract with the contractor, we do. The should not be allowed to withhold funds based on arbitrary standards while my family suffers.