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FDIC gives credits.

After six weeks of yelling and screaming over the unfairness of it all, attorney Jack Weprin has scored a major victory over the FDIC.

Property owners stung by the failure of American Savings Bank will now receive credits for money taken by the FDIC when American failed in June, a mere three weeks before semi-annual tax payments were due.

The Federal Deposit Insurance Corporation (FDIC) had taken 25 percent of all monies over $100,000 in the mortgage escrow accounts of 72 properties - including co-ops as well as commercial properties - saying the money, amounting to $2.23 million was not insured.

Weprin, a partner in Goldberg, Weprin & Ustin, said he received "tons of calls" from attorneys whose clients were losing money and told them all to write letters. Weprin himself contacted the Real Estate Board of New York, seven Congressmen, three Senators and the State Superintendent of Banking, and had the highest acclaim for Cong. Charles Schumer and his assistant, Courtney Ward. Weprin said Schumer now intends to introduce corrective legislation since mortgagors who question the health of a bank do not have the ability to withdraw escrow monies.

"Clients are now afraid to put money into escrow, "Weprin noted. "One bank said, |we're healthy and if you don't make the payments we'll start foreclosure proceedings."

On July 31, the FDIC wrote to those buildings which are not in default on their loans from American Savings Bank and notified them they have the right to offset any money due now to the FDIC.

Weprin said the FDIC "advanced" the necessary escrow money it had claimed for property taxes due in July, and he is taking the remainder of monies claimed by the FDIC on his buildings as a credit toward mortgage payments.

"They all hate me now down there now (at the FDIC)," Weprin sighed. "But it was worth it."
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Title Annotation:Federal Deposit Insurance Corp. to give credit to property owners for money taken by failed American Savings Bank
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Aug 19, 1992
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