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#1412965 - 07/08/10 06:23 PM Hold on insurance check
COMPLIcated Offline
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Joined: Mar 2003
Posts: 1,035
OK
Can we hold a check from an insurance company that was proceeds to repair a home that we have as collateral on a loan for as long as it takes to get the repairs done? I am thinking of Reg CC Sec 229.13(h) and the "reasonable time". It is a large exception hold because it was for over $7,000.

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#1413003 - 07/08/10 07:09 PM Re: Hold on insurance check COMPLIcated
Georgia Plum
Unregistered

Was the check made payable to you as well since you are the lienholder? If so, you could set up separate account to hold the funds until repairs are done, however, you can't do a Reg CC hold. If you hold the funds until repairs are complete, how is the customer going to fund the repairs?

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#1413470 - 07/09/10 05:05 PM Re: Hold on insurance check
BrendaC Offline
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BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
You can put the money in a savings and place the hold you need to protect the funds and control withdrawals (unless of course you have included savings accounts within the scope of your Reg CC policy).
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#1413550 - 07/09/10 06:47 PM Re: Hold on insurance check BrendaC
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Controlling the funds from such a payment when your collateral is involved is not a Reg CC concern. But keep the funds out of an account that's covered by Reg CC if you want to remove any possibility that someone -- an auditor or examiner -- might question what was done.

I join the opinions above -- put the funds in an account from which the bank can control disbursements until the repairs are completed.
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#1673130 - 03/05/12 05:08 PM Re: Hold on insurance check COMPLIcated
ItsJustMe Offline
Gold Star
Joined: Dec 2009
Posts: 298
New York
John...I don't understand why this is not a Reg. CC concern. Can you please help me understand? I thought that we'd be able to place a typical hold on the check, just as we would any other type of check. What am I missing?

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#1673137 - 03/05/12 05:17 PM Re: Hold on insurance check COMPLIcated
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
Not john, but typical hold sure. What they are talking about in this thread is holding the funds until the repairs are completed - as previously mentioned, this should be placed in a escrow/disbursement type of account and not plopped into the customer's checking account if you are concerned that the money is not going to be there to pay for the improvements.
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#1673159 - 03/05/12 05:36 PM Re: Hold on insurance check COMPLIcated
ItsJustMe Offline
Gold Star
Joined: Dec 2009
Posts: 298
New York
Thanks rlcarey...we don't hold until repairs are completed but we do place a 2 day hold on the check, just as we do any other check that warrants a 2 day hold. thank you for explaining...

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