Posted on 09/17/2007 11:28:24 AM PDT by 2banana
The mortgage holder will foreclose a lot faster than will the tax collector.
So if the mortgage company goes belly up, who are you paying the mortgage too?
If the servicer liquidates, either servicing rights will be sold in bankruptcy, or the holders of the obligations will designate a new servicer.
Who are they sending the mortgage payment to now?
The same folks who apparently have misapplied the escrow funds. The company is still in Chapter 11 at this point.
At this point, as pointed out up thread, the biggest concern of these borrowers should be in finding out whether or not they have homeowner's insurance.
Generally, the rule is if there’s no MI, you can opt out of escrowing, but in most cases, since Mortgage Insurance must be escrowed anyway they require you also escrow taxes and insurance with it.
I assume it is common, in my case putting down at least 20% allowed me to avoid escrow. Ditto for my brother.
But I thought the government "cared" about me. Jeez, another illustration of why expecting the government to look out for and protect you is not a wise move.
I would think the foreclosure action would fail in this case, since the mortgage holder has an obligation to handle the escrowed funds properly. Also, the homeowners should countersue and collect damages from the mortgage holder for their trouble.
IOW, they should pay the tax themselves, then deduct the tax from future mortgage payments, and sue the mortgage company if they foreclose.
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