Increase in my mortgage payment

[michaela]

I rec'd a letter in November from my MOrtgage company stating my escrow analysis. It said because of a shortage my mortgage payment will increase 700 dollars starting with my December payment. Can they do that?? I have been in the Bankruptcy since september 2010 I can afford an extra 700 dollars. Please advise

[OhioFiler]

I'm sure you misread the letter. $700 increase monthly? Probably more like a $700 shortfall that will be taken over the next year. Either your property taxes increased or your insurance inceased. Figure out which one and raise hell with them.

[michaela]

The letter states that I have a shortage in my escrow on 5990.44 I dont understand if im paying my mortgage payments. And you cant get through to them for nothing

[AngelinaCatHub]

The letter states that I have a shortage in my escrow on 5990.44 I dont understand if im paying my mortgage payments. And you cant get through to them for nothing

That letter was signed by someone. Get through to that person directly. Is your mortgage in a local bank? Go see that person if you can. It sounds like a bankers scam to me. Attempt to find out how many of those letters went out. If it is a printed form letter that bank may wish to make profits on holding (loaning) the increased escrow accounts. The money does not just sit there. Think our Country's General fund. They don't just make money over your interest. They loan out the so called "Trust Fund" collected for escrow payments. Your balance you have a right to know. I can't perceive your land tax going up. Too many houses are going down in value. I can believe the insurance going up but not THAT much. 'Hub

[momofthree]

Were you behind on your mortgage when you filed? This would explain the escrow shortage in such a large amount. If so, are the arrears being paid through the trustee? We usually have an escrow shortage each year too, but normally about $200 for the entire year! In fact, this year it was all of $34 and our payment is actually going to drop! Like a pp mentioned, your property tax shouldn't be going up in this economy, especially not to the tune of $6k.

[ValleYum]

The letter states that I have a shortage in my escrow on 5990.44 I dont understand if im paying my mortgage payments. And you cant get through to them for nothing

I would bet it is due to 'force-placed' homeowner's insurance.

If OP has been late with payments to their lender, the lender likely did not pay their homeowner's insurance premium and once it lapsed they 'force placed' insurance on it at a super inflated cost. There was a lot of screaming regarding this practice in the news last year since some of the large banks doing this (BofA for sure).

Why would your mortgage company pay more money for less insurance coverage?


Wait for it.........


Wait.................


Some of them own the insurance company that issues the 'force placed' coverage. Others just get large commissions for giving their company's 'force-placed' business to an insurer.

American Banker has articles about this here: http://www.americanbanker.com/issues...nopagination=1

and here: http://www.americanbanker.com/issues...1028475-1.html

[OhioFiler]

Probably spot on with the forced place insurance.

[karm43]

That happened to me by accident the ins company didnt take it out of my escrow and then i got a bill for almost 3000,from some other ins company luckily I was able to fix the problem, I have been with the same ins for 20 years here I didn't have ins for 3 months and didn't know it. It must say what its for.

[BobMango]

I had a similar problem. I was paying my property taxes directly before BK and stopped paying them well before filing. Mortgage company paid the back taxes to the tune of $8K+ and added $750 a month to my mortgage payment for 12 months. I got it paid off and am now current, but it was a tough year. Now I can't figure out where the money I was paying for that is going now? Must be the two kids in college cuz we haven't bought anything since bankruptcy; no TVs, no cars, no furniture, no nothing. Ok, we did have to replace the well pump and pressure tank for about $2,400 so that's part of it too I guess.

I'd definitely find out what the charge is for before just paying it. My credit union put forced placed insurance on my truck when I changed carriers and the new ins company didn't forward the insurance info. A quick phone call resolved it but the charge was over $1,200!

[AngelinaCatHub]

I had a similar problem. I was paying my property taxes directly before BK and stopped paying them well before filing. Mortgage company paid the back taxes to the tune of $8K+ and added $750 a month to my mortgage payment for 12 months. I got it paid off and am now current, but it was a tough year. Now I can't figure out where the money I was paying for that is going now? Must be the two kids in college cuz we haven't bought anything since bankruptcy; no TVs, no cars, no furniture, no nothing. Ok, we did have to replace the well pump and pressure tank for about $2,400 so that's part of it too I guess.



I'd definitely find out what the charge is for before just paying it. My credit union put forced placed insurance on my truck when I changed carriers and the new ins company didn't forward the insurance info. A quick phone call resolved it but the charge was over $1,200!

Hello Bob. Haven't seen much of you of late. As far as your insurance, you didn't pay that did you? 'Hub

[BigJohn]

Look at your coupon book. It should state what your insurance and taxes are for 2012.
Check your coupon book as to what was in your escrow account at the end of 2011.

Recalculate what your payment should be for 2012.

If you are like me, the mortgage company put some of your funds into a suspense account and then forgot to tell you about it.

My mortgage company does this every year. I take them to small claim court and get the money back.

This seems like a really good scam for mortgage companies.


I would also recalculate what your escrow should be at the end of 2011 and base this upon your payments made in 2011. Yes this will take some work but I suspect most people don't have a clue as to how to do this.

[BobMango]

Hello Bob. Haven't seen much of you of late. As far as your insurance, you didn't pay that did you? 'Hub

Hey Hub, got a couple of kids getting ready for college, amazing how much time that takes. Shouldn't they be doing all this stuff by themselves now.

Anyway, on the insurance, once I got the insurance carrier to send the proof of coverage to my lender they took the force placed ins off.