On Thu, 16 Oct 2008 07:17:23 -0500, Frank Boettcher
wrote:


True, although I've never seen a case where a first mortgage holder
did not require and execute the right to an escrow payment. Maybe in
some venues those holding that lien would take a certificate of
payment in lieu of collecting escrow, I've just never seen it when the
mortgage holder had the most skin in the game. After all, on most new
mortages if the homeowner lets the insurance or taxes lapse and the
house burns down or is subject to a tax sale, the mortgage holders is
left holding the bag. Disastrous on the insurance, a costly
irritation in the case of the tax lien.

In Illinois attaining 20% home value equity against the loan principal
erases mortgage insurance and perhaps escrow requirements.
That's my experience and I'm not getting into the weeds of law.
The mortgagee apparently gets tax payment info from the taxing
entity. Taxer is on the original closing documents.
In any case I never heard a peep in 11 years about taxes once I
dropped escrow payments. Of course I've always paid my taxes.
Dropping mortgage insurance and escrow did require me paying for an
appraisal. I'm foggy on whether mortgage insurance and taxes/home
insurance escrow are separable in the equity requirement.
I dropped everything at once.
My current 5-year-old mortgage has already been sold twice.
Home insurance, which I've also always paid on time, was a bit
different.
BOA, who last bought the mortgage, sent me a letter saying they would
soon charge me exorbitant insurance premiums unless I followed some
complex process to prove my home was insured. Part of it had me
personally faxing some info.
BOA knew when my insurance policy expired, and should have known who
my insurer was when they bought the mortgage.
I called my insurer - State Farm - and they told me that BOA should
have notified them they bought the mortgage allowing confirmation of
insurance payment to be sent to them instead of the prior mortgagee.
There is a common process and form mortgagees and insurers use for
these circumstances.
In the end, I raised hell with the insurance department of BOA about
failing in their process, and let them and State Farm work it out.
But whether this was an honest mistake or not on BOA's part is
questionable.
I'm sure some people pay double insurance when this happens, just
as some mortgagors pay mortgage insurance for the life of a mortgage
because they don't pay attention to their rights under law/regulation.
They naively think "somebody" is watching out for them and just pay
the bills sent to them.
My mortgage broker told me he has often encountered older folks
paying mortgage insurance that isn't required, costing them many
thousands of dollars.
And there are thousands of business executives whose sole purpose in
life is to squeeze a nickel from the unsuspecting.
Ethical conduct is not a given in business.

--Vic