What Happens to Escrow Funds during FC???

[Catia]

OK, property will be going into full FC soon.
I have escrow account funds paid in for an entire year--My Homeowners policy, and all prop taxes are paid annually using my escrow. Home owners policy is up for renewal either late March or early April--and should be paid using my escrow funds. I have a really good policy, and I pay more for it.
My question is--does a lender have any right to dip into my escrow funds to recover $$ allocated for Insurance or taxes if in pre-FC or full FC ???
I want to be positive my entire HO policy will be paid cuz FC takes forever here and it is backlogged due to so many--I want to be insured cuz the home going into FC is in a very high risk area, break-ins, stealing copper pipe/wire, squatting junkies trying to keep warm in winter starting fires--and people who will sue you for slip/fall even if they broke into your home and got hurt in the process-
-Sounds crazy, but it's true--2 of my neighbors had these things happen to them!!! the once working class neighborhood has turned into a war zone of desperate people. My nextdoor neighbor had all of her copper plumbing and wiring stolen mid day, along with stained glass windows--house was vacant 1 week!!! Other neighbor just around the corner had her house up for sale, it was vacant, and uninsured--a known drug addict broke in and was squatting there- trying to keep warm, he started a fire in old fireplace, and the house burned down--he is attempting to sue her?!?!!?
Because this home is vacant, and the fact that I wanna stay out of that neighborhood as much as possible, but I don't wanna get sued while FC is in process--even IF that could be released in BK, I just don't want that headache-I see what happened to my once neighbors-so I want to keep Ins to protect myself. So what happens to escrow funds???

[Catia]

Umm, I'm bumoing cuz I need an answer! Also, maybe I wasn't clear enough--Mortgage payment includes an escrow account for my taxes and HOI--what happened to the escrow account before/during FC??? Is mort co able to do whatever they want with the $$, or is it lawfully protected to go to just HOI and taxes??? ANyone???

[CindyLou]

I would call the escrow company and ask them and you will get a correct answer. Rules differe from state to state.

[Minnymouth]

One the home goes into foreclosure, and your give up your keys, the insurance, etc is the responsibility of the mortgage company... You are out of the picture then.
BUT UNTIL YOU GIVE UP THE KEYS and they take possession, you are responsible for insurance etc.
So protect yourself.
Some insurance companies will NOT insure a home that is vacant more than 30 days.... check your policy.

[Catia]

This is what I mean--sorry--the mortgage company is the SAME comapny that handles the escrow--escrow and my mortgage are in one pymt. As of right now, my home owners ins policy is ready to renew--and my property taxes are due. The $$ in the escrow account IS for PROPERTY TAX and HOME OWNERS INS--my question is--if the $$ is in the escrow account--can the mort co decide NOT to pay these debts and keep the $$ for themselves if you are behind???
I am now behind 2 full mort pymts--BUT--there was enough $$ in my escrow account to cover all expenses for taxes and home owners for the year--which should be being paid about right now--My question is--can the mort co decide NOT to pay these because I am 2 pymts behind on the mort???

[Minnymouth]

No they cannot take it and use it for their own benefit, it is designated strictly for property tax and insurance.

Them taking it would be like them stealing from your checking account.

When the taxes, etc come due they are required to pay them for you.

Now the Trustee could seize those funds if they aren't used for taxes, etc..... but as long as the property is in your name he won't do that.

[Catia]

THANK YOU Minnie!!!!!!!!!
I was worried --I want the taxes and home owners ins to be paid, that way while home is in FC it is INSURED. The neighborhood has turned into the 'hood' and I wanna be covered while the whole process in going on...
It's been on my mind big time cuz when the home next door to me went vacant--within 1 week--people stole the copper pipe and wire--And the one around the corner burned down because drug addicts were trying to keep warm...Scares me--now the house next door to me is vacant again--the lovely sect 8 tenants were evicted FINALLY--but they DESTROYED the plumbing--AGAIN--like niagra falls coming out of their bsmt door--windows broken--I cannot believe how bad this neighborhood got in 2 yrs time...
The foreclosures bring opportunistic slumlords--they buy the properties cheap and do not care who they rent to. I don't care about the jerk slumlord who owns the house next door and across the street, but my house is at risk due to the types he rents to.