Mortgage Company Refusing To Accept Payments
All,
I have a dispute with the mortgage company over the escrow account on a loan. I object to the two moths cushion as well as the incorrect amounts used to calculate escrow.
I sent them payment covering PITI with the true amount for escrowws. I received a letter from them stating that if I do not send the amount based on the incorrect escrow calculation, they would refuse my next payment and report me as being late.
Has anyone heard of this? Can a Mortgage Company legitimately reject a mortgage payment that fully covers my indebtedness and force me into foreclosure?
Please let me know what your thoughts are on this and if there is anyway I can protect myself in case this gets ugly.
Thanks.
JS.
The lender is permitted by law to have up to two months escrow surplus in your escrow account as a buffer against insurance and property tax increases.
The minimum escrow payment is usually calculated by adding the most recent property tax bill and the most recent hazard insurance bill, then dividing the total by 12. Then the lender projects what your escrow balance will be during the next year if you only made the minimum payment. If at any time during the next projected 12 months, your escrow balance falls below the amount needed for a two month cushion, then the difference is divided by 12 and that amount is also added to the minimum escrow payment.
Yes, you may very well be charged a higher monthly escrow payment than is needed to pay your taxes and insurance, and that may be due to the escrow shortfall the lender projected for your account.
If the property tax and insurance bills were actually less than what the lender is using to calculate your escrow payments, then you can appeal the escrow analysis as soon as you receive it in the mail. Give the lender proof of the actual amounts they should be using and they will recalculate your escrow analysis. Wait until the new escrow charge goes into effect, and you may have to wait for your next escrow analysis to sort everything out.
If you do nothing and you have an overage in your escrow account at the end of the year, the overage is normally refunded to you if it exceeds $50.
If you only submit a partial payment, the lender can reject it and declare you in default.
The lender holds all the cards.
You also need to read your loan documents to see how your payment is applied. Most of the time, payments you submit are applied in the following order::late feesarrearages escrow depositsaccrued interestloan principalWhen you made a partial payment, you probably still paid the escrow in full. The shortage is applied to principal and interest, giving you a late pay and incurring a late fee while your loan negatively amortizes.
A couple of late pays and your FICO suffers.
Winning this argument with the bank will be a phyrric victory
[ Edited by NewKidInTown3 on Date 11/23/2008 ]
A vendee loan is usually used in the context of a military service member loan program gererically called a VA loan.
The VA does not make loans, but guarantees the loans made to the military service members by institutional lenders following the VA lending guidelines. These loans are called vendee loans.
If you are eligible for a VA loan and want one, call your local banks and ask if they make VA loans. You need a VA certificate of eligibility, but after that the loan application process is essentially the same as any other conventional loan program.
What is your question?
Retirement accounts are exempt from attack by judgment creditors. Same with Social security income and child support.
Unless the lender obtains a deficiency judgment, the lender has no recourse against any other assets your friend may own.
401k is a retirement account and would still be exempt even if the 401k account is with the lender/
You mentioned an annuity as well. Is that held outside her retirement account and how much does the annuity make up of the $125k?
Ryan
Also, keep in mind there are other alternatives that can be used to avoid probate - eg. a living trust. With a living trust you can transfer most all your assets in and unwinding it or making changes later is fairly easy. Contact a good estate lawyer to get further details on your alternatives.
Thanks finniganps for the feedback I will definitely explore all my options. Has anyone ever used a land trust ? If so what are the specific advantages and disadvantages? Is it a long process to dreate one or is it a matter of filling out a few forms?[ Edited by daretwodream on Date 12/29/2008 ]
For probate avoidance, a Living Trust, like finniganps stated would probably work, vice a Land Trust. You should check with your attorney.
Don’t know how much someone would charge in New York, but I can get them done for as little as $595.00 for a single person. $795.00 for a couple here in Las Vegas. They usually take just a few business days to prepare.
John (LV)
Thanks cjmazur and jfmlv1950. The information was greatly appreciated and leads me on the right track towards accomplishing my goal.