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Question (CA): I have two houses on my property -- my small home and an even smaller rental unit. I was flooded by the Russian River on 12-31-05. I submitted my loss estimates for my home -- mostly personal property under the house (garage) due to the 5' of water. My small rental unit was totally destroyed. EMC Mortgage Corporation bought my loan on 2-06. I received a check from my flood insurance, Hartford, for $28,900+ in March 2006, but contacted my adjuster and explained there were many items that were not considered, but should be covered. We had a good working relationship. I redid the entire estimate in extensive detail.

Since that time, my adjuster has submitted my claim for an additional $10,000 in benefits to finish the rental unit. The problem arose when I needed to forward the insurance check to EMC so they could return the insurance benefits to me, so I could finish the house and rent it. I am a retired, disabled school teacher and the rental is crucial to my financial survival. By the time I talked to EMC the first time, I had invested about $67,000 in both my houses.

Very little was covered on my house because much of the repair (roof) was above the water line. I also had to put in septic tanks because the former owners disclosed there were septic tanks, but when I hired a company to check them, I found cess pools. The former owners falsified the sale documents and did not disclose the cess pools. I got a lawyer, who charged me $608 to write a letter to the former owner's lawyer. That was it!

But that is not the problem. I have run out of money. I had about 80 percent of the rental complete when EMC told me the hoops I would have to jump through to get the very flood insurance money I needed to make repairs to the damage done by the flood. They said they would return my insurance money in 3 installments "if repairs were done up to their standards."

They sent me 8 pages of documents for myself and my contractor to sign and have notarized. I have already sent them a detailed contractor's bill and the detailed estimate of payment, item for item from Hartford. They said, upon receipt of these items, they would issue the first "draw" of $10,000 of my own money. Today, they informed me they would only give me $7800 for the first draw because they were deducting $2,200 I had received previously. The $2,200 was not for the rental -- it was basically for property under my house and the clean up of black mold which put me in the hospital. These are apples and oranges. The check EMC is still holding for $28,900+ is to replace/repair the rental unit. One simply has nothing to do with the other.

EMC says they will release money in 3 to 5 then 7 to 10, then an unknown number of processing days. To date, I have not received a dime from them. The contractor had to leave the job until we get insurance money to finish the project. I am now officially bankrupt -- I put every penny I had in the rental unit for two reasons: I had complete confidence in Hartford (still do), and I needed to finish the unit ASAP in order to rent it. I have had 3 back surgeries, am 62 years old, and had to retire early, so I only get about $1400 a month. That is approximately the amount of my mortgage payment. I can work part time with a brace.

I have spoken with 14 lawyer’s offices. They all want retainers, but one woman told me EMC's actions are illegal. EMC's plan for releasing all other insurance benefits to fix my home is this: I need to finish the house, (with what money I do not know,) and if it is up to their standards, they say they will release the remainder of the money.

I have talked with Dept. of Justice, FEMA, District Attorney, Better Business Bureau, the list goes on. I tried to refinance to get away from them, but I have a 20 percent prepayment penalty.

When you go online and search for "complaints against EMC mortgage corp," there are about 166,000 of them out of the 466,000 loans they hold. But they are owned by Bears and Stearns -- a huge corporation. I have also spoken with a lawyer in Florida who is bringing a class action suit against them for their biggest and most widespread swindle, the late fee pyramid scheme. One of the women at Greenpoint, who had my loan before EMC bought it, told me EMC had purchased 3.1 billion in loans, mostly from elderly people with low incomes -- that's me. I saved for 18 years to buy this house -- I plan to live and die here. EMC informed me if they are not happy with the final work on my rental unit, they do not have to pay me my flood insurance proceeds.

I have told EMC over and over again we will provide them with receipts for the $67,000 already spent. They just don't care. I never wanted to send them the insurance check, but finally, I had no choice. I have talked to so many agencies, government reps -- they all tell me this is not legal and that it amounts to fraud -- but no one can help me. I am crossing my fingers you can or at least point me in a direction before they take my house and the insurance money.

Answer: While we understand the source of your concerns, a lender has a vested interest in seeing that the house is rebuilt to acceptable standards. The lender has a lien on it as security and doesn't want to see the value of that security decline.

Nonetheless, we are very sorry that you are having such an unacceptable degree of difficulty, that apparently government officials are unresponsive to your needs, and that so many attorneys have failed to suggest the California Bar as a source for legal help. Based upon what you have told us, we believe you need legal help at a reasonable fee or at no fee. While you have raised the potential of many injustices allegedly perpetrated by the practices of that particular mortgage company, your personal needs and a swift resolution are your primary focus.

To access the California State Bar, click here. Once there, select "Public Services| Assistance Programs| Find An Attorney" on the left-hand navigation bar and you will see a hyperlink "Finding An Attorney for Legal Advice" as the very first bulleted hyperlink. Click on it, and then scroll down to Free Legal Aid Agencies. Note that the following URL is hyperlinked within the paragraph, LawHelpCalifornia.org. Select it, and you will be re-directed to that site. Yes, we know you could have simply clicked on the last hyperlink, but we believe it is in a consumer's best interest to know from whence the hyperlink came.

Question (MS): I am interested in investing in Texas. Please give me a call at the number I provided to you.

Answer: We agree with you. Texas is a great place in which to invest. We do not, however, use the Ask George & Chuck column to solicit real estate or law practice clients. There exists a plethora of websites any one (or several) of which should be more than willing to meet your needs. We suggest that you choose your favorite search engine and enter a search string containing what your are seeking, such as "Texas+Commercial Real Estate+ROI 10% greater" or "Texas+Residential Real Estate+10% greater" (without the quotes).

Question (NY): My husband and I recently purchased a home in New Hartford, NY. At the closing, the owner handed us a set of keys to the house (front, rear doors) and upon entering the premises we discovered that none of the keys fit the house and we were forced to break the door to gain entry. We would have appreciated her honestly admitting to not having any keys at all. Also when asked if there were any defects in the structure she only disclosed a slight leak in the garage that routed water into a drain.

The second day was warm and the ranch house was in need of clean air and to our dismay, none of the windows were in working condition and needed immediate replacing as it was impossible to open or close them properly.

What is our recourse to this dilemma under the disclosure requirements? Had she informed us properly, we would have made arrangements to secure more funds to purchase this property. It now becomes very much of a financial problem for us to encounter before winter sets in due to the fact that our present home has not been sold. Can we sue her for the lack of information and extra costs that we must incur? Do we need an attorney?

Answer: We empathize with your situation and the disappointment you must be experiencing. In order to gather information and documents pertaining to your real estate transaction before you contact a New York attorney experienced in handling this type of case, we believe you should be aware of the following information:

  1. The Attorney General's Office of the State of New York issued this document; and,
  2. Our website, askgeorge.net, contains a search feature (second button from the left) and if you click on the button then enter "New York disclosure" (without the quotes), two articles we published (on 08/08/06 and the other on 08/22/06) will be returned. Just click on the linked area to read the complete Question and our Answer to it.

In addition, we have a few questions, such as the following, that may have a bearing on your case, if you decide to pursue litigation:

  1. Did you personally see the home before signing the contract?
  2. Did you have the home inspected by someone qualified to perform residential inspections?
  3. Were you represented by a New York licensed real estate agent?
  4. Did you have an attorney review the contract, or did you at least have as a contract provision that it was subject to approval by your attorney? (we realize that this provision would be the same as closing the barn door after all the livestock have already left);
  5. Did the seller provide you with a Property Condition Disclosure form ("PCDA") or, alternatively, were you credited $250.00 at the closing in lieu of the seller's providing you with the PCDA form?

We believe you should at least spend half an hour with a reputable New York attorney who has successful experience in dealing with real estate matters. That way, you can be assured that you have obtained his or her legal advice as to the merits or deficiencies of a lawsuit should you decide to proceed. If you do not know of an attorney, the New York State Bar provides a service called the "lawyer referral service" that can be accessed here.

Question (WY): A young lady is renting an apartment in Houston, Texas. She likes the area and wants to stay there, but rain is coming in the apartment through windows, etc. She has talked to the apartment management people and they promise to correct the situation, but no action is being taken. Is there some kind of tenant advocacy group in Texas where she could go to try to get something done?

Answer: Some Tenant Advocacy groups in the Greater Houston Area and also the state of Texas follow:

  1. The Harris County Dispute Resolution Center at (713) 755-8274 offers pro bono mediation for tenant disputes.
  2. For information from the Texas Tenant Advisor, click here.
  3. For information on housing discrimination and fair housing initiatives, call the Greater Houston Fair Housing Center at (713) 641-3247.
  4. For information about landlord and tenant issues from the People's Lawyer, click here.
  5. Other resources can be found at https://realestate.findlaw.com/tenant/; and,
  6. This site allows tenants to rate their apartment complex, https://www.apartmentreviews.net/ratings/tx-houston.htm.

There is not a lot of Tenant Advocacy material here, but hopefully one or more of these sources will prove useful.

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