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Banks
Bank’s flood, fire coverage requirements
Our client’s bank is increasing their flood insurance requirement from $185,000 to $250,000. The client recently took out a second mortgage with this bank, which also holds their first mortgage. Can the bank make this requirement? Isn’t there a law about how much insurance a bank can require?
Lenders—FEMA checks
Our client received his FEMA claim check and when he attempted to deposit it into his bank account the bank, who happens to be a mortgagee, confiscated it and told him the funds will be held and that the bank will decide what funds are to be released when they (the bank) receive either estimates or completed work orders from repairing and renovating the property. Can they do this?
Severability of interest
I have a bank requesting a “severability of interest endorsement” on a general liability policy for a co-op building. We are seeing this request more often from banks, but are not sure what it accomplishes.