Monday, October 23, 2006

Road Home Math

Cassandra called and answered several of my questions regarding the Road Home letter we received last week. She had to call Washington for clarification, but I'm happy to report that the math works, though there are still many other problems that we need to work out, mostly related to Allstate.

~The Road Home estimated that our house was worth $146,154 before Katrina. I still have no idea how they determined this. It might be what we owed on the mortgage in August of 2006. Someone else said maybe it was property tax. I have a call in to Cassandra to find out more about this important number.
~The Estimated Damage to our home according to the Road Home was $289,363.80. That seems very high, especially if it was worth around $175-200K before Katrina.
~Homeowner's Insurance Proceeds $12,495.67
~FEMA Assistance $0
~Flood Insurance Proceeds. They list $64,541 on the Road Home form, but National Flood has actually paid us $69,541.46.
~Penalty Assessed for No Insurance: $0.

So now at least the math works: $146,154 minus $12,495.67 and $69,541.46 equals $64,116.87, which is what the Road Home offered us in the initial letter, if we stay in Louisiana. I'm so happy that at least the math is accurate.

Now I need to do two things. First, I need to find documentation that our house was worth more than $146K before Katrina. I have the bill of sale for $157K in 2002. When we refinanced in 2004 it was valued at $175K. I was of the opinion that it wouldn't matter if it were 157 or 175, and anything over 150 we be treated the same. This doesn't seem to be the case. I'm now trying to contact my mortgage company/realitor to document the $175K. If I can't find that, then I will fax the Road Home the bill of sale for $157K. The second thing that I need to do is to convince the Road Home that Allstate has not paid us $12,495.67 for homeowners, instead they have actually paid us $3944.73. I'm thinking I might be able to get a letter from our mortgage company stating that and not have to deal with Allstate.


mominem said...

I'm glad it was apparently just a typo.

My understanding of the prograam, which is tenious at best is that you can collect up to $150,000 in uncompensated structure damage, regardless of how much you house is worth, of course if you house is worth less that $150K you can hardley have more that $150K in damage.

In theory a person with a million dollar house who didn't have excess flood insurance could collect the $150K.

The interesting thing I see in your numbers is that they are not allowing anything for residual value of the house or land. I though that was part of the program as well.

Another interesting thing is that you actually have to spend the money to get it. I'm not sure what would happen if you spent the Road Home Money first and then spent the insurance money but I suspect they will want some money back, if you ended up with money left over.

Anonymous said...

I think you should spend $250-$350 for a professional apprasial of your house by sales comparisions for both 8/27/05 and present. I understand the road home will accept your appraisal but of course you should check. It could make a big difference. My property value almost tripled between 1996 and 2005 from $55 to $152 a square foot. if a comparably renovated house sold in your immediate area for $100 or $150 a square ft in 120 days pre-K you should get that price as your starting number which makes a big difference in your final number. Spend another 100 to get your current value inclded in the report which you can use against allstate because you can quanitfy your damages in lost property value.

Anonymous said...

Michael, Did you e mail Sam?

mominem said...

My understanding of the policy is that a post-K appraisal is not acceptable. On the other hand if you have a pre-K appraisal the lending document should do, since they were all based on an appraisal. They should then apply appreciation to your value.

I'm at a loss to understand how they arrived at your pre-K value.

Anonymous said...

Michael, All of the 5 letters that my contacts have recieved have had mistakes on the insurance part and the pre-storm value part. Essentially, they are MOSTLY wrong. I think Road Home has made a temporary mess with these letters possibly sent out under pressure of 10k letters needing to be sent out by the end of the month. Now what is happening is that people will be scrambling to pay for appraisals and spending time researching their insurance proceeds- all this is supposed to be done by road home- not by people who have been dealing with stress for the past year.