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  • Mortgage Unemployment Insurance

    Hello all,

    I recently got laid off by my company which gave me 5 months of
    severance. (Good company, no complaints other than being laid off).
    The severance was 3 months plus 2 more for signing a release agreement.

    I have this Mortgage Unemployment Insurance (aka, Involuntary
    Unemployment Insurance), and they have been giving me the run around.
    First, they had all these requirements for documents they "must" have.
    Ie. The *application* for my loan. I asked why it had to be the
    *application* and they just said, "because that's what we want, and
    closing documents do not count." After digging up all the documents
    they needed (I'm a pack rat, so HA on them!), they are now delaying
    payments for 5 months due to the following line in the insuring agreement:

    "Involuntary Unemployment does not include ... any period of time for
    which You are receiving termination or severance pay ... "

    They also list a bunch of other reasons, but those aren't applicable.
    So my question is if this is legally correct. First off, I believe at
    minimum, 2 months should not be included because I signed a release
    agreement. Secondly, I received my severance as one lump sum on the day
    I got laid off, so since I am no longer receiving severance pay, I
    should not be penalized.

    Can someone give me legal reasons that I am wrong or correct? I'd like
    to come back at them saying, "By XXX court ruling, and by XXX law, you
    are not allowed to delay payments." Or does anyone know a lawyer that
    would take this case in Colorado? This is several thousands of dollars,
    so depending on how much lawyer fees are, I might be willing to pay it.

    Thanks!

    Jason


  • #2
    Mortgage Unemployment Insurance

    Jason <[email protected]> wrote:
    [OP was laid off, received 3 months severance pay plus
    2 months for signing a realease. OP has Mortgage
    Unemployment Insurance. Insurance paper includes the
    following:]
    "Involuntary Unemployment does not include ... any period of time forwhich You are receiving termination or severance pay ... "They also list a bunch of other reasons, but those aren't applicable.So my question is if this is legally correct. First off, I believe atminimum, 2 months should not be included because I signed a releaseagreement. Secondly, I received my severance as one lump sum on the dayI got laid off, so since I am no longer receiving severance pay, Ishould not be penalized.
    I can't give you a court ruling, but in California you would qualify
    for unemployment insurance for those 5 months. I also received a
    hefty severance package when I was laid off, called the Unemployment
    office, and asked.

    Beyond that, it might be worthwhile for you to see a real live lawyer.
    If you are in the right, your lawyer will write them a letter telling
    them to pay up, and it will probably carry more weight than anything
    you can tell them.
    --
    I pledge allegiance to the Constitution of the United States of America, and
    to the republic which it established, one nation from many peoples, promising
    liberty and justice for all.

    Comment


    • #3
      Mortgage Unemployment Insurance

      In article <[email protected]> in
      misc.legal.moderated, Jason <[email protected]> wrote:
      "Involuntary Unemployment does not include ... any period of time forwhich You are receiving termination or severance pay ... "They also list a bunch of other reasons, but those aren't applicable.So my question is if this is legally correct. First off, I believe atminimum, 2 months should not be included because I signed a releaseagreement. Secondly, I received my severance as one lump sum on the dayI got laid off, so since I am no longer receiving severance pay, Ishould not be penalized.Can someone give me legal reasons that I am wrong or correct?
      It says "... any period of time FOR WHICH you are receiving ...",
      not "during which". In other words, if you are paid up front an
      amount that is supposed to cover a future time, you are being paid
      for that future time and are not entitled to collect.

      The two months of /douceur/ for signing the release agreement
      doesn't qualify as severance pay in my opinion, and therefore I
      don't think you are being paid for those two months. (My opinion
      proves nothing at all; see disclaimer in sig.) You should have
      paperwork from your former employer: is the two months included as
      severance pay? Can you gt a letter from them saying it's in
      consideration of a release agreement and is not part of severance?

      I don't think you're entitled to the three months; if you want to d
      collect the two months you may have to sue. Small claims court seems
      a reasonable option. Whether you'll prevail is anybody's guess, but
      it won't cost you much to find out.

      --
      I am not a lawyer; this is not legal advice. When you read anything
      legal on the net, always verify it on your own, in light of your
      particular circumstances. You may also need to consult a lawyer.

      Stan Brown, Oak Road Systems, Cortland County, New York, USA
      http://OakRoadSystems.com

      Comment


      • #4
        Mortgage Unemployment Insurance

        "Stuart O. Bronstein" wrote:
        There's your problem. Unemployment is not supposed to replace income. It's to act as emergency funds so you're not thrown out on the street before you can get another job.
        Then why isn't is needs-tested?
        If you want insurance to replace your salary if you are laid off, get it yourself - it will be very expensive. A lot more expensive than the withholding that is taken for unemployment.
        This discussion is comparing apples and oranges. You don't have a
        choice about Unemployment "Insurance". Both enrollement and the
        terms are dictated unilaterally by "the government". (Disclaimers
        for the choices of the political process, and shopping for states
        with different programs.)

        But within the context of this program, about which the worker had
        no choice, there are questions as to what it means to be "unemployed".
        And I stand with those who say "If you're not working, you're unemployed,
        even if while you were working you earned a severance package which is
        only payable upon getting laid off, and which is calculated in terms
        of a time period and a rate of pay which is, or which is based on,
        your prior salary."

        Sometimes you step in crap and wind up smelling like a rose, other
        times you wind up smelling like crap, and other times you wipe it
        off. Sometimes you get laid off and you end up in a better,
        higher-paying job; sometimes you're out of work and not getting
        paid for a while, putting a serious dent in your career pather;
        other times you're out of work for a few weeks but pretty soon
        you're back in the saddle again. You never asked for Unemployment
        Insurance to make you whole, but you expect it to meet its advertised
        terms, along the lines of 50% of your salary, up to a cap, for up
        to some period like 6 or 9 months, while you're involuntarily out
        of work and looking for work.
        --
        - David Chesler <[email protected]>
        Iacta alea est

        Comment


        • #5
          Mortgage Unemployment Insurance

          David S Chesler <[email protected]> wrote in message
          news:<[email protected]>. ..
          "Stuart O. Bronstein" wrote:
          There's your problem. Unemployment is not supposed to replace income. It's to act as emergency funds so you're not thrown out on the street before you can get another job.
          Then why isn't is needs-tested?
          If you want insurance to replace your salary if you are laid off, get it yourself - it will be very expensive. A lot more expensive than the withholding that is taken for unemployment.
          This discussion is comparing apples and oranges. You don't have a choice about Unemployment "Insurance". Both enrollement and the terms are dictated unilaterally by "the government". (Disclaimers for the choices of the political process, and shopping for states with different programs.)
          David,

          If you go back and read the original post, you will see that he is not
          talking about State Unemployment Insurance or Benefits. He purchased
          Mortgage Unemployment Insurance, the kind that almost every mortgage
          banker and broker offers you, and almost all wise persons decline to
          purchase because the exclusions preclude your receiving payment in
          almost all circumstances. He is bound by the conditions of the
          insurance contract. Sounds like the insurance contract specifically
          excludes the OP's circumstances. Rules for State UI vary and exclude
          the severace period in many cases, based on the definitions in the
          statute or regulation. Private insurance is governed by the insurance
          contract, and of course state law. I doubt that there is a state law
          that defines when an insurance contract can preclude Mortgage
          Unemployment Insurance payments, due to the insured receiving
          severance pay.

          So all this cute stuff about what UI is about is beside the point.

          Cheers!

          Brian

          Comment


          • #6
            Mortgage Unemployment Insurance

            [email protected] (Brian D'Souza) wrote in message
            news:<[email protected]>. ..
            Then why isn't is needs-tested?
            If you want insurance to replace your salary if you are laid off, get it yourself - it will be very expensive. A lot more expensive than the withholding that is taken for unemployment.
            This discussion is comparing apples and oranges. You don't have a choice about Unemployment "Insurance". If you go back and read the original post, you will see that he is not talking about State Unemployment Insurance or Benefits. He purchased Mortgage Unemployment Insurance, the kind that almost every mortgage banker and broker offers you, and almost all wise persons decline to purchase because the exclusions preclude your receiving payment in almost all circumstances.
            Gotcha, although we seem to have topic-drifted into the state
            program called Unemployment Insurance right from the first reply.

            OP's policy said
            >> "Involuntary Unemployment does not include ... any period of time for>> which You are receiving termination or severance pay ... "
            And IMHO a lot hinges on "for". A less ambiguous wording would
            be "during", with a secondary explanation "Any severance pay, or
            similar payment from the employer to the employee payable in the
            case of involuntary termination[*][.] shall be considered to be
            salary continuation, at the last rate of pay paid[+], for a period
            of time equivalent to the amount of time it would have taken for
            the erstwhile employee to have earned that pay if he had not been
            terminated."
            [*] They might insert here "Other than for cause" or other words
            to mean layoffs, RIFs, redundancies, and so forth;
            [.] They might insert here "Determined by multiplying a period
            of time by a rate of pay"[^]
            [+] Or if they want to be mean, at minimum wage :-(
            [^] IANAL. But I am a SW Engineer, and a lot of what I do is
            defining the rules for "When is a this a member of that class?"
            Here I'm trying to capture the essence of "layoff" and "severance
            pay". Just because you have to roll-out your 401(k) when you
            leave the company doesn't make it severance pay in almost
            everybody's eyes.

            When is any pay earned? If it's on a cash basis, then the rate
            of pay is several million dollars a year every Friday afternoon,
            and zero the rest of the time. Similarly, the severance pay
            was _earned_ during the time before the layoff. (Some companies
            make it very clear: You will be laid off in three months. If
            you stay until the end, training your replacement, you will get
            this severance package. And if you sign this release, you will
            get a bigger package.)
            He is bound by the conditions of the insurance contract. Sounds like the insurance contract specifically excludes the OP's circumstances. Rules for State UI vary and exclude the severace period in many cases, based on the definitions in the statute or regulation. Private insurance is governed by the insurance contract, and of course state law. I doubt that there is a state law that defines when an insurance contract can preclude Mortgage Unemployment Insurance payments, due to the insured receiving severance pay.
            So then it comes down to interpreting the contract. And
            certainly not pondering the whys and wherefores.

            --
            - David Chesler <[email protected]>
            Iacta alea est

            Comment

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