Mortgage Issues In Bankruptcy

29 Jan Chapter 13 Debtors Beware: Recurring Problems with Mortgage Companies – Part 4 Forced Escrow

In parts 1, 2 and 3 we discussed how mortgage companies often engage in "double dipping", how they often fail to send you monthly statements, and they ways in which they misapply monthly mortgage payments during your Chapter 13 case. Part 4 discusses how a mortgage company can force a homeowner to add escrow to their monthly payments. Many individuals file a Chapter 13 bankruptcy because they fell behind on their mortgage and property taxes. A Chapter 13 bankruptcy will allow you to pay the back due mortgage payments and property taxes over a period of three to five years, rather than coming up with a lump sum to get both current. As long as you continue to make your monthly Chapter 13 plan payments and your ongoing mortgage payment, the mortgage company cannot take any adverse action against you or your property. However, if you fail to pay your property taxes the mortgage company could step in and pay them without giving you notice.
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25 Jan Chapter 13 Debtor’s Beware: Recurring Problems With Mortgage Companies – Part 1 “Double Dipping”

Mortgage companies are well known for havingnumerous and continuous problems keeping a proper accounting of the mortgages they hold. This is particularly true in the context of aChapter 13 case where the mortgage company is paid by the Chapter 13 Trustee for the pre-petition arrears, and by the homeowner for the ongoing post-petitionmonthly mortgage payments. Oftentimes, the problem with the mortgage company is that one department has no idea what the other department is doing within the same company. Usually,the one who gets hurt by this practice is the homeowner. Oneflagrantongoing problem is that of “double dipping”.
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