Loan Modification and Forced Escrow

[CSPYDER]

Hi Guys...okay, so I'm new to this whole "tell it all" arena. So please forgive me if protocol slips here and there. Where do I begin? We purchased our home in 2002 with an adjustable rate loan that began to adjust upwards each year. So...our solution was to refi. Big mistake! We ended up with another adjustable rate loan with a higher interest and no more equity in our home.

Several months ago (8?), we pursued a loan modification to help us during some financial difficulties...so naturally I thought that our prayers were answered when we were granted the modification. This brought our payment back within reason and we were on our way to the land of comfort again....

However, we experienced another financial set-back which caused a lapse in homeowner's insurance...so we were forced to repay for the insurance policy placed on the property by the mortgage company. They forced an escrow on our mortgage payment of nearly $400 which took the payment back up out of our range...again, more financial set-backs followed.

Currently, we are 38 days past due and finding it very difficult to catch up as our other expense have fallen behind and are demanding payment. There's something about those utility companies that's makes you want to pay them...like bathing, cooking, etc.

We believe we can turn our situation around to our benefit with some assistance but don't know where to begin...as I'm afraid now to make demands of the escrow dept. since we've rectified the insurance issue and received notification that the forced insurance has been cancelled.

Our conversations with the mortgage company (Fremont Inv. & Loan) have been cordial up to now...I'd like to keep it that way. If things turn ugly, I'd hate to loose our home when the solution may be just around the corner.

I welcome any insight...thanks CSPYDER

[Moe Bedard]

Hi CSPYDER,

Welcome to the forum and thank you for joining...........

I am not sure that they will give another modification to you.......maybe a forebearance, but it doesn't look like that will help.......

What was your modified interest rate and terms that they gave you initially?


Here is the Fremont Loss Mit number that we have:
1-866-484-0291

[CSPYDER]

Hey ***,

Thanks for the response!

The modification gave us a new fixed interest rate of 7%...tell me more about this forebearance. What can I do to have them remove the forced escrow or at least adjust it to cover my new insurance premium or property taxes for next year? CSPYDER

[Moe Bedard]

A forebearance is when they take your past due payments and divide them up over a certain amount of months and put that amount on your current payment so you have the opportunity to pay past due amounts over time and not one lump sum.

As far as a modification having a tax escrow......if your taxes had fallen behind as a result of the hardship and the lender had to pay them......then they have every right to escrow for them............

This post clarifies that.......
http://www.loansafe.org/forum/tell-u...rty-taxes.html


Here are the RESPA guidelines as per HUD on your insurance issues with the lender.......

I got a notice that my hazard insurance has been canceled. My lender force-placed hazard insurance with a different company and it costs a lot more. Can a lender do this?


As long as your mortgage payment is not more than 30 days late, Section 6 of RESPA requires the lender to make escrow payments, for taxes, insurance, etc., in a timely manner. You should write to your lender and complain. If your lender does not refund the difference or otherwise resolve your complaint satisfactorily, you may wish to file a complaint with HUD or the Consumer Protection Office of your State Attorney General's Office. You may also wish to consult an attorney.



What steps should I take if I think the lender is requiring too much money in my escrow account?

First, figure out the maximum amount RESPA allows to be required in your escrow account from the example. If you still believe your lender is requiring too much money, you should contact your lender for an explanation.

Section 6 of RESPA provides that borrowers may make a "qualified written request" to the lender concerning the servicing of their loan account. The request should not be included with the monthly mortgage payment. The lender must acknowledge the complaint within 20 business days and must resolve the complaint within 60 business days by correcting the account or giving a statement of the reasons for its position. If you do not get a satisfactory answer from the lender, you may wish to file a complaint with HUD. You should continue to make your mortgage payment during this time.