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Frank Boettcher

On Wed, 15 Oct 2008 10:42:40 -0700 (PDT), wrote:

On Oct 14, 10:27*am, Dave wrote:
On Tue, 14 Oct 2008 06:03:41 -0700 (PDT), said:

Dave, I'm sure you know more about the Federal and NY (and probably
other states too) banking regulations than I do.

Yes. That's why I asked the question.

I also know that NC
law *still* forbids a contractee from using a change of address to
change the terms of a contract. I know (unspecifically) that other
states have changed laws affecting this in the past 12 years, maybe
there are also Federal laws involved (other than Article 4 of the
Constitution). For example, when the bank holding our mortgage was
bought out back in the late 1990s, they sent us a very sugary letter
explaining that they were kindly NOT changing the terms of our
mortgage. OTOH I know of several people around then, and in subsequent
years, who have had resold mortgages with changed terms. Insurance and
tax escrow arrangements, for example.

Let's be clear on this. A mortgage contract is a contract. Its terms can't
be changed by just one of the parties, whether because it's been sold to a
new party for any other reason.

Sure... and we all know that praying for rain doesn't *really* affect
the weather

... What I think you mean is that the original
mortgage contract, to which the mortgagor agreed when he borrowed the money,
allowed the lender to, for example, require that insurance and taxes be paid
to the bank's escrow account

What I mean is that the while the "terms of the contract" were not
changed (cough cough), the amount of money owed somehow was different
than originally agreed to.

cannot, I repeat, cannot happen.

This happened to almost everybody I know during the past 10 ~ 12
years. It's a really surprising coincidence that it happens about the
same time that the bank sells the mortgage, doncha think?

It is quite possible that upon selling the loan the escrow items can
be reevaluated based on increases in the property tax millage or
appraisal, or the insurance rate can go up. That happens as a matter
of course whether the loan is sold or not. Most do the evaluations
and adjust escrow payments requirements once a year.

But that money is not the banks, it is yours, held in escrow to pay
the above mentioned items, and if the balance becomes too large it can
be adjusted down. If you are in disagreement with the escrow
calculation (I have been in the past) you can protest it and have it
lowered (I did). And when you close the loan by selling the house you
will recieve any balance that remains after paying your obligations to
the date of the closing.

But the principle balance and interest obligation cannot, I repeat,
cannot change, as a result of selling the loan.

Frank

Regards- Doug King