kisersassy wrote: "Walter Mortgage took excessive amount for our escrow for taxes and insurance. I asked them why so much and they told me that they are allowed to take however much they want for escrow. "
Oh really? You may find the following excerpts from http://www.hud.gov/offices/hsg/sfh/res/respafaq.cfm (FAQ about HUD regulations and the Real Estate Settlement Procedures Act (RESPA) regarding management of escrow accounts) useful:
"Does RESPA require lenders to maintain a cushion?
NO. The RESPA statute and regulations do not require the lender to maintain a cushion. However, since 1976 the RESPA statute has allowed lenders to maintain a cushion equal to one-sixth of the total amount of items paid out of the account, or approximately two months of escrow payments. If state law or mortgage documents allow for a lesser amount, the lesser amount prevails."
"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. "
That last excerpt is the most useful, because you don't have to be a lawyer, or quote law to them, you can just make a "qualified written request" and report them to HUD if they don't reply within prescribed time limits, or give a satisfactory answer.
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In Your Future? Frustration
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Countrywide doesn't dispute that problems in the process are commonplace. Spokeswoman Jumana Bauwens says consumers need to remember that doing a loan modification is almost as complicated as getting a mortgage in the first place, so there does tend to be lots of paperwork. In most cases Countrywide doesn't actually hold the homeowner's loan, it merely administers it on behalf of an investor that also must sign off on modification plans.
Bauwens says Countrywide is working hard to process the swelling number of modifications. In February 2008 it modified 9,200 loans, up from 1,361 the prior year. To handle the dramatically increased volume, Countrywide is hiring more employees. Her advice to people who find the process frustrating: "Call back at least once a week," and be especially attentive if you've been relying on fax machines to send the paperwork.
But, of course, the problems may not always be quite as complex as the company would have its customers believe. Within hours of NEWSWEEK calling Countrywide to inquire about the Acevedos' case, a company representative had called the family. "They've straightened everything out," Angie wrote in an e-mail on Tuesday.
That may not be a huge consolation to the thousands of other borrowers who are biding their time on hold. But as home prices continue to fall and more borrowers find themselves in need of a modification, correctly dotting the i's and crossing the t's has rarely been more important.
Daniel McGinn is a national correspondent at Newsweek and the author of "House Lust: America's Obsession With Our Homes." For more information click here.
© 2008
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