Mortgage Broker HoustonHouston Mortgage Broker
A Houston lawyer is suing his mortgage bank after his home was swamped during Hurricane Harvey for supposedly telling him not to buy flooding protection when the lawyer buys his home, and voicing concern about similar charges after four storms landed in the United States and their territory just this year. The lawyer claims in his appeal - lodged in the southern district of Texas - that he initially took out tsunami protection coverage to protect his home when he acquired it in the fall of 2011.
However, when the lawyer submitted his evidence of cover to his lender, the lawyer claimed that the mortgage lenders were advising him not to buy tsunami protection because the house was not in a tide zone. Now, the mortgage lenders are not going to buy tsunami protection. Lawyer says he trusted the mortgage lender's counsel and terminated his tsunami policy before the end of the mortgage term.
The lawyer claimed in the suit that the mortgage provider was negligent in giving "homeowner' s assurance " and that the mortgage provider was negligent in misrepresenting that the home was not in a high tide area. Also, the lawyer asserts that the mortgage provider was involved in the illegal practices of insuring by conducting "flood assurance consulting and other advice" during the credit claim procedure.
In general, the National Law on Protection against Floods, which set up the NFIP, obliges creditors to establish whether the ownership is in a flooding area and, if so, to inform creditors and make sure that protection against flooding is in place. Historically, many borrower lawsuits have been brought against their creditors because they have purportedly not correctly determined whether the ownership is in a high tide area, but the court has made it clear that the law has not created a personal lawsuit against creditors who do not abide by its rules.
Instead, state legislation checks whether there is a commons lawsuit against a creditor who purports not to duly inform a debtor that the ownership is in a flooding area. What constitutes this latest novel of cases is that the claimant claims that his creditor participated in the "unauthorized exercise of insurance" - an question that has not yet been clarified in the credit-contract.
In view of the recent floods throughout the country, banks should be ready to tackle and avoid these kinds of demands by concentrating on full respect for the law and the NFIP.