Different states have different laws....each of us as short sale listing agents have different experiences....and I do not mean to imply this to be a situation that is always and everywhere...it is here...and "May come to your market soon." As soon as we take a short sale listing...if the seller(s) have any sort of accounts in the same bank that holds their mortgage....we have them switch banks. Lenders here, have emptied these accounts that were savings for moving expenses, security deposits, etc. They can....it is legal....and they can choose to apply or not apply it as they see fit to "expenses", interest, etc. While this may not be a practice where you practice currently....better safe than sorry. Sally K. & David L. Hanson , CDPE - Wisconsin
I just had a customer that stopped making their mortgage payments and the lender took the money out of their account to pay for the 2 months that were due. They have their bank account with the same bank that has their mortgage. Needless to say they changed bank accounts right away!
Fantastic! I just had a homeowner who had a mortgage with Wells Fargo and all of his banking with Wells Fargo. At the end of July 2010, right after both his and his ex-wife's payroll hit their personal banking accounts, Wells Fargo "transferred" their entire balances from banking and savings to cover the late payments on the mortgage! This left them without a dime to live on and Wells Fargo claimed their banking agreements gave WF the right to do this. We are still working on this issue. So before it is too late....transfer accounts!
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