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my mortgage lender took my escrow and put it on my principal

Hi there. Please, someone give me some leagal truth. I called my mortgage lender and asked them to recalculate my escrow. I only escrow my taxes, My insurance is paid for the year by me. My payment is 881.00 principal and interest and 266.00 escrow. I had 2900.00 in my escrow account in october. my taxes are 2300.00. I am broke and wanted to know why i should send that 266.00 in Nov and Dec. They told me i had to send it or i was making an incomplete payment. I asked them what they were planning to do with the excess of almost a thousand dollars and they said excess escrow would be sent to me after the taxes were paid. When i got my Nov statement, my escrwo balance was lowered by 881.00 and that amount had been paid to my principal balance. Is that leagal? That is exactly what i told them I did NOT want to do!!!! I can't afford it right now. This was my last ditch effort for christmas for the kids and i feel like they went into my personal account and stole from me. Can i stop this? They told me it is policy. I am so tired of being pushed around. I went through nearly two years of a forbearence with this company before finally catching up my mortgage. I am powerless and they have gotten more than 16,000 in excess funds on a 106,000.00 mortgage to stop forclosure. I am still paying friends and family off. please help me. Kristine.

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Kristine!

Welcome to forums!

I don't think that lender is legal in doing so. You can speak to them once again and can ask for an explanation as to why they are doing so or if they will continue doing the same thing month after month. You have the right to ask for an explanation. In case things get worse or the lender does not provide you a proper explanation, then I suggest you to consult a mortgage attorney.

Feel free to ask if you have further queries.


Like | Dislike | Share | Posted: Wed, 11/05/2008 - 20:37 | Post subject:

Jessica's picture
Jessica | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi fireflyf,

If you have already made your payment towards the principal, then I think it is not legal to reduce your escrow balance. However, you should have a straight talk with them as to what they are exactly planning to do with your escrow. I feel at least they should have informed you prior to lowering your escrow balance.



Like | Dislike | Share | Posted: Thu, 11/06/2008 - 05:50 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I missed a few payments on my interest only mortgage. my bank added the missed interest payments to my mortgage principal. so i will be paying interest on interest. can they do this?

Like | Dislike | Share | Posted: Wed, 05/20/2009 - 09:44 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

The lenders have the right to add the missed payments on your principle amount if you cannot pay them their dues on time. There is nothing illegal in this.


Like | Dislike | Share | Posted: Wed, 05/20/2009 - 21:39 | Post subject:

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