Check out some similar questions!

wtc00rjk · Jan 10, 2012, 01:55 PM

I am in process of getting a modified mortgage. The mortgage company is over charging for escrow on both insurance and taxes by 55%. Also, they want to add the amount I am behind on payments back on top of the current principle. If I told them that the escrow amount for insurance and taxes is not correct, but they said they would not change it. I also told them that they cannot add the past due amount to the actual principle balance. I was told that unless I signed I would be foreclosed in 30 days. I told them I could only sign under duress because they refuse to make correction and are threatening me with foreclosure. I was told that if I signed under duress they would foreclose. Can a mortgage company do what they are doing?

ScottGem · Jan 10, 2012, 05:40 PM

First, how did you calculate the escrow amount? They are allowed to collect an escrow amount that will keep the balance more than two months worth of payments. So their calculation may be correct.

And what makes you think they can't add the past due payments to the principal?

Fr_Chuck · Jan 10, 2012, 08:53 PM

This is not duress, it is a business choice, you can tell them no, and merely catch current payments up and keep your current loan. They have no obligation to give you the new loan.

You can go find another company to loan you the money,

You do not have to sign. It is a business choice,

They can of course foreclose if you don't bring current loan up to date, that is their right also.

This is a hard business choice, but not duress

wtc00rjk · Jan 11, 2012, 06:51 AM

If you borrowed $2000 and agreed to pay back 100 per month, but after paying it down to $1000, due to unfortunate circumstances you get behind , let's say 3 months. Does that now mean you owe $1300? Not quite! You still owe $1000 plus late fees possibly, but not the balance of $1000 plus $300. Simple math. Had you padi it the balance would have been $700

ScottGem · Jan 11, 2012, 07:54 AM

Originally Posted by wtc00rjk

If you borrowed $2000 and agreed to pay back 100 per month, but after paying it down to $1000, due to unfortunate circumstances you get behind , let's say 3 months. Does that now mean you owe $1300? Not quite! You still owe $1000 plus late fees possibly, but not the balance of $1000 plus $300. Simple math. Had you padi it the balance would have been $700

Not quite. You don't include interest in the calculation. So to you your analogy (and make the math simple), take your $2000 loan and you pay the principal down to $1000 at 6% interest. You then miss 3 months. The amount you owe not is not $1000, but now $1157.63, because of interest that has accrued during the missed payments. It is that amount (plus late fees) that can be added to the principal owed.

excon · Jan 11, 2012, 08:03 AM

Hello w:

It's not a matter of right or wrong.. It's not EVEN a matter of how the numbers add up.. It IS a matter of negotiation, and who ran roughshod over who... You LOST.

Now, you COULD have hired your own gun to stand toe to toe with the bank. You didn't.

Can you do anything about it NOW? I don't know. Hire a lawyer to see if he can get the contract modified. For SURE you can't do it yourself.

excon

AK lawyer · Jan 11, 2012, 06:43 PM

Originally Posted by wtc00rjk

I... Also, they want to add the amount I am behind on payments back on top of the current principle. ... I also told them that they cannot add the past due amount to the actual principle balance. ...

The word is "principal".

But I'm wondering how you propose paying the delinquency if you don't want it added to the principal balance of the new loan? Are you going to pay it at closing?