Dealing with insurance claims and check endorsements can be a frustrating process, especially when your mortgage lender is involved. As one of the largest mortgage servicing companies in America, Bank of America has specific procedures in place to handle insurance claim checks for homes they hold mortgages on.
While these procedures are meant to protect their interests in the property, they can create headaches for homeowners trying to get repairs completed and funds released in a timely manner. Here’s what to expect when navigating insurance check endorsements with Bank of America.
Why Do Mortgage Lenders Require Endorsement?
When you have a mortgage, the lender places a lien on your home. This gives them a financial interest in the property. If the home suffers damage and you file an insurance claim, the lender wants to ensure any insurance funds are used to repair the home so their collateral (your home) retains its value.
To guarantee the funds are utilized properly, lenders require “endorsement” on large insurance claim checks. This means both you and the lender must sign the check before funds are disbursed.
Some specific reasons lenders require endorsement:
- Protect their interest in the home by ensuring repairs are completed
- Prevent fraud or misuse of insurance funds
- Ensure their collateral (your home) maintains its value
- Avoid problems if the home goes into foreclosure down the road
While endorsement is a prudent business practice for lenders, it can complicate things for homeowners needing timely repairs.
Bank of America’s Endorsement Process
Bank of America has specific procedures in place to handle endorsement of insurance claim checks for mortgaged properties:
- You must endorse the check and send it to Bank of America.
- For claims over $10,000, they initially release only 20% of the funds to start repairs.
- An inspector verifies completion of repairs before they release the remaining funds.
- The entire process can take 30 days or longer.
This staged release of funds can make it difficult to hire contractors and complete major repairs. Many homeowners report frustration with long delays in getting Bank of America to release the bulk of their insurance money after repairs are done.
However, there are some steps you can take to streamline the endorsement process with Bank of America:
Tips for Endorsing Checks with Bank of America
Request two-party check – Ask your insurer to issue two checks: one for 20% of funds payable to you, and a second check for the remaining 80% made payable to both you and the lender. This allows you to access repair funds right away while the lender endorsement is processing on the larger check.
Communicate with your lender – Let Bank of America know details about your claim, contractors, project timelines and the urgency of repairs. Respond promptly to any requests for documentation.
Hire reputable contractors – Use licensed, bonded contractors who are familiar working with lender-endorsed insurance funds. Provide detailed contracts and invoices to your lender.
Inspect repairs yourself – Bank of America may take weeks to schedule their own inspection. Consider hiring an independent inspector to document repair completion to move the process along.
Follow up frequently – Don’t wait for your lender to contact you. Call Bank of America weekly for status updates if funds are delayed. Be polite but persistent.
Escalate issues – If funds are still stalled after repairs are done, file complaints with regulators and contact Bank of America executives to resolve the issue.
Consult an attorney – If Bank of America unjustifiably withholds funds beyond reasonable time frames, an attorney can help apply pressure and determine if legal remedies are available in your state.
Things to Avoid When Endorsing Insurance Checks
While you should diligently follow up to obtain your insurance funds after repairs are done, it’s also important to avoid some common mistakes:
Don’t deposit the insurance check without lender endorsement. This can trigger legal issues.
Don’t hastily endorse checks presented by contractors. Review funds dispersal terms with your lender first.
Don’t use repair funds for other purposes like debt payments or renovations. Lenders disburse funds solely for documented repairs.
Don’t make excessive calls and threats. Overly aggressive behavior often slows the process further.
Don’t stop making mortgage payments. Failure to make payments can complicate endorsement issues.
Insurance check endorsements can quickly become a headache with a large lender like Bank of America. But utilizing tips like obtaining a two-party check, submitting proper documentation, following up diligently and escalating issues can help reduce delays in getting your insurance funds released.
Key Things to Know About Bank of America’s Endorsement Process
Below are some key facts about Bank of America’s procedures for endorsing and releasing insurance claim checks:
You must sign the check and submit it to Bank of America before funds are released.
Checks issued by the insurer for claims over $10,000 require both you and Bank of America to endorse the check.
Bank of America initially releases just 20% of total insurance funds when repairs commence.
An inspector verifies completion of repairs before Bank of America releases the remaining 80% of funds.
Bank of America may take 30 days or longer to fully endorse and release insurance funds after repairs are completed.
Homeowners often complain of long delays and poor communication during the endorsement process.
Bank of America requires detailed contracts, invoices and inspection reports to release final funds.
Persistent, professional follow up is key to getting Bank of America to release funds timely after repairs are done.
Why Bank of America’s Process Frustrates Homeowners
There are a few core reasons homeowners often express frustration about the property insurance check endorsement process with Bank of America:
1. Slow release of funds
Bank of America is notoriously slow in releasing insurance funds, even after repairs are fully completed and validated through inspections. It’s not uncommon for them to stall release of funds for months after work is done. This strains contractors waiting to get paid.
2. Poor communication
Homeowners complain Bank of America has terrible customer service when they inquire about status of fund releases. Calls go unreturned, issues fall through the cracks and there is lack of transparency about release timing.
3. Inconsistent inspection timelines
Bank of America may take weeks or months to schedule their own inspector to verify repairs are complete. This delays release of funds even when project completion can be validated much sooner.
4. Lost paperwork
Homeowners repeatedly submit required invoices, contracts and inspection reports, only to have Bank of America claim they’ve lost documentation. This further drags out the process.
5. Leverage over homeowners
Because they hold the mortgage and insurance funds, Bank of America has all the leverage in the situation. Short of lawsuits, homeowners have little recourse when funds are unjustifiably delayed.
Steps to Speed up the Insurance Check Endorsement Process
Because Bank of America’s procedures often create delays in releasing insurance funds, homeowners need to take proactive steps to try and expedite the process. Here are some tips:
Request a two-party check from your insurer
The best option is having your insurance company issue two separate checks:
One check made out to just you for 20% of the total funds. This money can be accessed quickly to initiate repairs.
A second check made payable to both you and Bank of America for the remaining 80% of funds. Submit this check to your lender for endorsement.
This ensures you have repair funds upfront while the lender endorsement process happens on the larger check.
Communicate timeline and urgency of repairs
Provide Bank of America details on repair scope, contractors, timelines and the urgent need to commence repairs. Convey that delays could result in further property damage.
Use reputable contractors
Hire properly licensed contractors who are familiar working with lender-endorsed insurance payments. Get multiple bids.
Submit all required documents upfront
Provide Bank of America thorough documentation including repair contracts, invoices, permits pulled, inspection reports, etc. to expedite underwriting.
Self-inspect repairs frequently
Don’t wait weeks or months for Bank of America’s inspector. Hire your own inspector to validate repair completion so funds can be released.
Follow up regularly on status
Call Bank of America every week for updates if funds are not released timely. Escalate to managers if reps don’t provide clear status updates.
Submit regulator complaints
If funds are withheld for unreasonable time periods, submit complaints to regulators like the Consumer Financial Protection Bureau.
Consult an attorney
If Bank of America will not release funds after justified delays, hire an attorney to review options and apply pressure.
The endorsement process on large insurance claim checks involves added steps but staying proactive, communicating clearly and following up diligently can help reduce delays in getting your insurance funds released by Bank of America.
Mistakes to Avoid with Bank of America Endorsements
When navigating the insurance check endorsement process with lenders like Bank of America, it’s also important to avoid these common mistakes:
Does Bank of America accept endorsed checks?
How to get an insurance check endorsed by Bank of America?
How do you endorse a check to an insurance company?
Can I deposit a two party insurance check into my bank account?
When a insurance check is made out to you and to the bank?