NJ Lenders Owe 'Covenant' In Use Of Insurance Funds

By Bill Wichert (October 22, 2021, 5:25 PM EDT) -- Mortgage lenders must abide by an implied covenant of good faith and fair dealing in evaluating whether to use insurance proceeds to make repairs to damaged property or pay down a debt, a New Jersey state appeals court said on Friday in a published opinion that upended a foreclosure judgment against a couple.

A New Jersey couple argued that $150,000 in flood insurance coverage should go toward repairing their home, which was damaged in Superstorm Sandy in 2012, not toward their mortgage. (AP Photo/Wayne Parry) In finding that lenders owe that implied covenant to borrowers in such cases, a three-judge Appellate Division panel...

Stay ahead of the curve

In the legal profession, information is the key to success. You have to know what’s happening with clients, competitors, practice areas, and industries. Law360 provides the intelligence you need to remain an expert and beat the competition.

  • Access to case data within articles (numbers, filings, courts, nature of suit, and more.)
  • Access to attached documents such as briefs, petitions, complaints, decisions, motions, etc.
  • Create custom alerts for specific article and case topics and so much more!


Attached Documents

Related Sections

Law Firms

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!