Stephanie
Haverstraw,#2Consumer Suggestion
Sat, May 05, 2007
First and most important - please find a HUD approved foreclosure prevention counseling agency. You can do this either by searching www.hud.gov or looking on any late payment notices from your mortgage company, they give the HUD number where you can receive free counseling. A lawyer will want a large amount of money up front and most people in foreclosure do not need a lawyer. Foreclosure counselors are trained in foreclosure prevention and can explain exactly what you can do. Mortgage companies will work with you. Unfortunately, Matthew, the mortgage company not applying your extra payment to the mortgage is not illegal. Most companies have something called a suspense account (or unapplied funds or something similar). When you send a partial payment, they put this amount into your suspense, each time you send extra money they continue to put it in suspense until it reaches the amount of a full payment. Then they apply it. Please also note, if you do send extra money to the mortgage company, you need to let them know where to apply it. Many have suspense accounts and some just put it in escrow. Regarding the escrow. If your mortgage company pays the taxes/insurance (meaning you don't physically pay it on your own) they will escrow an amount to cover both throughout the year. If your mortgage has recently been sold to a new company, they will continue to collect escrow even if the original company has already paid the taxes/ins. If they increase your escrow, this is normally because the taxes have increased. If you feel that the increase is too large, go to your local tax assesors office and get a print out of your taxes. It will normally show 2 years worth and you can see how much they have increased. This will help you figure out if the mortgage company's escrow increase is justified. But my best advice for EVERYONE is please please please let the mortgage company pay your taxes and insurance. It may seem easier to pay just the mortgage monthly but then you have a huge amount of tax to pay at once. Also remember, if you fall behind on your taxes, they can foreclose on you also. Having it all escrowed is the safest bet for everyone! Stephanie