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.
In Part 1 we discussed how mortgage companies often engage in "double dipping" when you are in a Chapter 13.Part 2 deals with howmortgage companies commonly fail to send you a monthly statementwhile you are in a chapter 13 bankruptcy.
In many parts of the country, when you file a Chapter 13, you continueto make your regular monthly mortgage payments directly to the mortgage company rather than in the Chapter 13 plan.The mortgage company, however, may not send a statement each month requesting a payment, or even showing that a payment is due. Of course the mortgage payment is still due, butthis creates a whole host of problems.
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 â€œdouble dippingâ€.
Based upon all of the agreements I have seen lately, the answer is clearly NO! Mortgage companies coerce homeowners into signing these oppressive agreements that include waiver of liability clauses releasing the lender from any wrongdoing.
I met with a firefighter and his wife yesterday regarding a foreclosure defense case. They had a first mortgage through Chase with a decent fixed rate, and their troubles had nothing to do with a change in their economic circumstances. Rather, Chase unexpectedly jacked up their escrow by a few hundred dollars per month to provide an â€œescrow cushion.â€
Well, it is common knowledge that these mortgage companies keep most interest earned on escrow accounts, which rightfully belongs to the homeowner. So, this couple was genuinely upset and sought answers from Chase. Of course, as anyone who has tried knows all too well, it is impossible to get answers from mortgage servicers.
As a result of the escrow increase, this couple fell behind in their mortgage payments. They actively sought a resolution with Chase, and in June of last year, they entered into a modification agreement that they believed resolved the dispute with the escrow account.