[ex-Texan]

Found this report by pure luck today. Many surprises are in store for the victims of Katrina and Rita. The U.S. economy may take a much bigger hit than was reported earlier. (Learn More Here) Insurance claims will be denied almost automatically under two major policy exclusions: flood damage and mold infections. Even when major damage was caused by high winds with no evidence of flooding, damage caused by rain and mold will be denied. Many claims will be denied wrongfully, in violation of the insurance contract, requiring policy holders to file suit. Several insurance companies based in Louisiana have simply stopped answering phone calls; it is assumed they have ceased all business operations.

Hurricane victims will also discover they will not be allowed relief under the new Bankrupcty Act. Some members of Congress are pursuing special legislative relief for hurricane victims, but there is no guarantee antime soon. Mortgage payments remain due even though homes were destroyed and policy holders' claims denied lawfully or unlawfully. Most lenders will grant home owners ninty days grace to make payments, but the payments will be entered on the lenders books as late. The destruction to the victims credit reports may be catastrophic. Just some minor insights from a retired geezer. Please hold the flames.

[RockinRight]

No flames here, you are 100% correct.

[Rodney King]

If I owned a home with a mortgage, and insurance wasn't going to cover my losses, I would be quite happy to take the credit report hit in exchange for sticking the mortage company with the destroyed house.

[BureaucratusMaximus]

Mortgage payments remain due even though homes were destroyed and policy holders' claims denied lawfully or unlawfully.

OK...call me young and naive here, but, is this possible? I mean...is a mortgage company really going to foreclose on a 75% to %90 destroyed house in a cesspool or a on a lot where a house used to be (destroyed by the hurricane)? I would suppose that if the city I lived in got a couple nukes, (while I was out of town of course) rendering my house destroyed and land unhabitable that the same concept applies?