A Florida homeowner’s federal lawsuit accuses a major insurer and mortgage servicer of mishandling a hurricane claim, blocking repairs, and failing to follow federal rules.
In a complaint filed in the US District Court for the Southern District of Florida, Johna Swanfeld alleges that Citizens Property Insurance Corporation and Freedom Mortgage Corporation mishandled her insurance claim and mortgage servicing after Hurricane Milton struck her Fort Pierce home in May 2024. The suit describes delays, denied repair programs, and mounting financial and emotional strain.
Swanfeld’s difficulties began after Hurricane Milton left her home at 117 Gotham Drive with significant water and structural damage. A comprehensive inspection on January 18, 2024, had identified pre-existing vulnerabilities, and a follow-up inspection in May 2024 documented the hurricane’s impact. According to the complaint, Swanfeld filed a claim with Citizens Property Insurance, but encountered a series of obstacles.
The lawsuit alleges that Citizens delayed processing the claim, failed to provide clear information about repair options, and denied Swanfeld access to the Managed Repair Program. The complaint states that Swanfeld was provided with incomplete details about mitigation steps and was left to navigate unclear requirements. It further alleges that Citizens’ representatives provided inconsistent guidance, required unnecessary documentation, and did not coordinate effectively with contractors or Freedom Mortgage.
Central to the dispute is the handling of insurance proceeds. The complaint asserts that Citizens issued insurance payments, but the funds were placed in an escrow account managed by Freedom Mortgage. Swanfeld alleges that Freedom Mortgage did not release the funds in a timely manner for repairs, resulting in further property deterioration, increased costs, and continued mortgage obligations while the home remained uninhabitable.
The complaint references HUD Handbook 4000.1 and 24 C.F.R. § 203.377, which require mortgagees to preserve and protect the property and communicate with borrowers about repairs. Swanfeld alleges that both Citizens and Freedom Mortgage failed to comply with these requirements, including by not coordinating repairs and not releasing insurance funds as required.
Swanfeld also alleges that Citizens’ representatives made statements characterizing her as uncooperative and aggressive, complicating her efforts to resolve the claim. The complaint cites failures to comply with the Real Estate Settlement Procedures Act (RESPA) and the Fair Housing Act, highlighting the broader regulatory context for the insurance and mortgage industries.
Swanfeld seeks damages of $115,000, including $75,000 for property damage and $40,000 for lost income, as well as compensation for business interruption, loss of use, and other hardships. The complaint does not request a jury trial. These allegations remain unproven, and the case is pending before the court.
For insurance and mortgage professionals, this case highlights the operational and compliance risks that can arise when disaster claims are not handled properly. As severe weather events become more common, Swanfeld’s case underscores the stakes for insurers and mortgage companies in ensuring timely and coordinated responses to property claims.
