When you are in Chapter 13 can a mortgage company take part of a payment and apply it to attorney fees and not notify you that it has been done? Then hold the balance of the payment and not apply it to the loan? Further charging a late payment fee even though the payment was not late, but because the mortgage company decided to use it in a different way than it was intended for.

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Originally Posted by shagnasty

When you are in Chapter 13 can a mortgage company take part of a payment and apply it to attorney fees and not notify you that it has been done? Then hold the balance of the payment and not apply it to the loan? Further charging a late payment fee even though the payment was not late, but because the mortgage company decided to use it in a different way than it was intended for.

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If you have filed in Chapter 13 - and it would appear you have - this is a question for your Attorney to answer.

That sounds pretty irregular to me. If you are making payments in keeping with the terms and conditions of the mortgage agreement then you are not in default and shouldn't be considered as such.

I believe it may be. In your mortgage payment book, does it list something about how fees will be applied? Quite often there is a paragraph there saying how the money is applied, and if it says it will be applied to any outstanding fees first, and then to the payment, that's what you agreed to when you signed the loan.

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Originally Posted by froggy7

I believe it may be. In your mortgage payment book, does it list something about how fees will be applied? Quite often there is a paragraph there saying how the money is applied, and if it says it will be applied to any outstanding fees first, and then to the payment, that's what you agreed to when you signed the loan.

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There very well may have been charges for the Bank's Attorney's appearance at the various Bankruptcy Court Hearings and these charges could now be your responsibility. In my area the Attorney charges between $500 and $1,000 to appear at a Bankruptcy Hearing to protect the Bank's interest. These charges have nothing to do with your original mortgage payment agreement and are in addition to your monthly payment(s).

Again - I wouldn't fool around with this, particularly because you have (presumably) paid an Attorney to represent you at the Chapter 13 Hearing - you don't want to do anything now to put yourself back in jeopardy. Check with the Attorney who represented you.

Acually I did talk to my attorney and she did tell me that the mortgage company could do that and did not have to take a partial payment so I had to send them the fees for them to have a complete payment.

You are correct. They can deduct from any payment outstanding balances from attorney fees then hold what's left until they have a complete payment. What is worse is they can start foreclosure while holding a partial payment according to my attorney.