Consumer complaint received 2026-06-06 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Trying to communicate with the company to fix an issue while managing or servicing your loan
Company: U.S. BANCORP
State: AR

Complaint narrative:
U.S. Bank is improperly withholding a portion of insurance proceeds from a homeowners insurance claim despite clear documentation showing that part of the insured loss is not related to, and is not secured by, the mortgage collateral. We have provided repeated documentation including parcel maps, deed/loan origination appraisal records, and aerial imagery clearly demonstrating that the damaged outbuildings are located on separate parcels of land that are owned free and clear and are not included in the legal description of the mortgaged property. Despite this, U.S. Bank is holding insurance funds and applying internal repair completion requirements as a condition for release, including requiring proof of repairs based on a third-party inspection that assessed overall percent repaired. These requirements are being applied to the entire insurance claim, including structures that are not part of the mortgaged collateral. Property / Claim Details : * Mortgage covers primary dwelling and approximately XXXX acres of land. * Damaged outbuildings are located on separate parcels not subject to the mortgage deed of trust. * One damaged structure is a portable carport added AFTER loan origination, & is going to be removed from the property. * Dwelling damage has been fully repaired and verified ( ~ {$1400.00} ). We have clearly stated that we are not rebuilding or repairing the outbuildings. All remaining damaged structures will be demolished and removed, and as previously stated, U.S Bank has no legal say or stake in structures belonging to us, and not tied to the mortgage collateral what so ever. Problem : U.S. Bank is refusing to release insurance proceeds associated with non-mortgaged parcels unless internal repair completion thresholds are met ( e.g., percentage-based repair requirements from third-party inspection results ). These conditions are being applied despite the fact that portions of the insured loss are not part of the mortgaged collateral and therefore should not be subject to mortgage servicing control. We have repeatedly provided documentation proving parcel separation and ownership, but the funds continue to be withheld without clear contractual or legal justification. Requested Resolution : We request that CFPB require U.S. Bank to : XXXX. Provide a written contractual/legal basis for withholding insurance proceeds tied to non-mortgaged parcels. XXXX. Immediately release insurance proceeds associated with structures located outside the mortgaged collateral. XXXX. Correct their loss draft handling to ensure insurance proceeds are allocated based on collateral interest, not blanket repair completion requirements. Timeline of Events : * XXXX : Insurance claim filed following storm damage affecting multiple outbuildings and dwelling. * XXXX : Insurance company issued a single claim check payable to both borrower and U.S. Bank due to mortgagee clause requirements. * XXXX : Started the process of mailing claims check to U.S Bank Loss draft department. Was told that day by XXXX different customer representatives that we would qualify for their waterfall process due to the uniqueness of our situation, and would receive the funds in full, mailed back to us in check form, made payable only to us. * XXXX : Bank began holding portion of insurance proceeds under standard loss draft procedures ( approx. funds above {$40000.00} threshold ). Provided initial documentation including parcel maps, appraisal reports, legal descriptions, insurance details, and explanation that damaged structures are located on separate parcels not tied to the mortgage. * Between XXXX and XXXX : received several different phone calls in that time period, all from different representatives offering different information each time. Some stating the first {$40000.00} was being mailed to us, some stating the remaining funds were also being released, others stating no funds would be released until an inspection was complete. * XXXX : Bank ( or loss draft department ) requested third-party inspection to verify repairs. * XXXX : Virtual Inspection completed ; inspector acknowledged issue and indicated understanding that certain structures were outside mortgage scope. * XXXX : After inspection, Bank representative claimed inspection showed approximately 30 % repairs completed and stated XXXX % repair completion required to release remaining funds. We reiterated that no repairs will be made to outbuildings ; structures will be demolished. Only dwelling repairs were completed ( approx. ~ {$1400.00} ) and verified with inspector. * Current : U.S. Bank continues to withhold remaining insurance proceeds despite documentation showing non-mortgaged parcel ownership and lack of collateral interest. We have exhausted normal servicing channels without resolution. We are requesting prompt intervention as this issue can not be resolved through standard servicing channels and continues to result in improper withholding of funds not tied to the mortgage collateral.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with monetary relief