NJ Lenders owes a ‘commitment’ in the use of insurance funds

By Bill Wichert (Oct 22, 2021, 5:25 p.m. EDT) – Mortgage lenders must adhere to an implied commitment of good faith and fairness when assessing whether to use insurance proceeds to repair damaged property or pay off a debt, a New Jersey state appeals court said in a published notice on Friday that overturned a foreclosure judgment against a couple.

A couple from New Jersey argued that $ 150,000 in flood insurance coverage should be used to repair their home, which was damaged in Storm Sandy in 2012, not their mortgage. (AP Photo / Wayne Parry) In finding that lenders owe this implied commitment to borrowers in such cases, a three-judge panel of the Appeals Division …

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