Mr. Karl Deeter:

It is important to realise an insurer looking at a likely claim will always do things that are in its interest to reduce the cost of that claim so, again, what they were doing was not necessarily altruistic. If they made some kind of offer to pay out, particularly at a time when prices are falling, depending on the underlying policy, if it was a case that as prices fell and they expected that property to get lost anyway, the person was going to do a voluntary surrender and they were willing to help clear that, obviously they will ask to pay it now. As far as I know, the borrower will still be due any shortfall even though the bank may have received the insurance.