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Months after May tornadoes, Oklahoma contractors struggle to deal with mortgage companies

By trade, Robert Jackson is a roofer in Oklahoma City. But there are days when it seems like he deals with mortgage companies for a living.
by Silas Allen Modified: January 28, 2014 at 10:36 pm •  Published: January 28, 2014

By trade, Robert Jackson is a roofer. But there are days when it seems like he deals with mortgage companies for a living.

Since a round of tornadoes passed through the Oklahoma City area last May, Jackson, of Highlander Roofing and Construction, has been hard at work, repairing and replacing roofs damaged in the storms.

But it's often weeks or even months after the work is done before Jackson gets paid for the job, he said.

The problem, Jackson said, is that insurance companies make claim checks payable to both the homeowner and the bank that holds the mortgage on the home. Many of those banks seem to be dragging their feet about turning over the payment once the work is done, he said. At the beginning of the year, mortgage companies owed Jackson's company a combined $65,000, he said.

“It's pretty obvious that they are trying to sit on the money as long as they can,” he said.

Jackson isn't alone. Kelly Collins, a spokeswoman for the Oklahoma Insurance Department, said the department receives many calls from tornado survivors who are trying to have their homes repaired, but run into roadblocks from their mortgage companies.

Banks that hold mortgages have an interest in seeing damaged homes repaired, Collins said, so they also have an interest in how insurance payments are spent. After the May tornadoes, some lenders were willing to release the money more quickly so homeowners could get their homes repaired faster, but others refused.

Dudley Gilbert, a deputy commissioner with the Oklahoma Bank Department, said there's no law that requires mortgage companies to turn over insurance money on any particular timetable. Many smaller community banks simply endorse the insurance checks as soon as they get them, he said, but other lenders have lengthier processes.

When an insurance company pays a claim, many mortgage companies divide that amount of money up into three payments, Jackson said. For example, if a homeowner hires Jackson for a $25,000 job, the first payment could be $10,000 to $12,000 to cover materials.

The second payment is generally released a short time later, Jackson said. Before he ever sees the final payment, mortgage companies generally want an inspector to look over the work.

That last step can be difficult to schedule, he said, and it means the final payment is delayed further. When he calls the companies to try to find out when he might get paid, he has to make his way through an automated answering labyrinth before he can get an answer.

“You can spend hours of the day trying to get a human on the phone,” Jackson said. “It's a job that we're not being paid for.”

Having payments delayed for weeks makes it difficult to go on from one job to the next, Jackson said. It's especially difficult if the company takes three or four mortgage jobs back to back, because the company expends all its resources trying to deal with mortgage companies.

Jason Casteel, a contractor with Oklahoma City-based Big Sky Companies, said his company has seen the same problems. He suspects nearly every contractor is in the same situation, he said.

Just getting a representative from the mortgage company on the phone at all can be the most difficult part of the process, Casteel said. Representatives often don't answer their phones or answer voice mails, so it can take weeks to schedule a time for an inspector to look over the property, he said.

The process varies quite a bit from one company to the next, Casteel said, but Bank of America and Nationwide are typically the most difficult mortgage companies to deal with.

In a statement, Bank of America officials said the company has completed payments on nearly 98 percent of all Oklahoma tornado claims they received, with only 58 claims outstanding.

“We believe the results of our response across the disaster area are noteworthy,” the statement said. “The results demonstrate the urgency of our initiative to assist homeowners while protecting against unscrupulous conduct by distributing portions of the insurance proceeds as the property repairs progress.”

Nationwide officials declined to comment, saying they couldn't confirm they handled the cases in question.

by Silas Allen
General Assignment/Breaking News Reporter
Silas Allen is a news reporter for The Oklahoman. He is a Missouri native and a 2008 graduate of the University of Missouri.
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