On Thu, 16 Oct 2008 08:37:21 -0500, Vic Smith
wrote:

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.

PMI is not the insurance I was referring to. It is generally required
unless 20% is down or until that point when the mortgage has had 20%
of the principle paid down. Normally, it is automatically eliminated
at that point.

It is not an escrow payment subject to adjustment.

I was referring to Homeowners insurance.


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.

Unusual, in most cases it is not your choice to drop escrow payments
for tax and homeowners insurance. it is stipulated as a right of the
first mortgage holder to collect and most do. PMI addressed above.

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.

Don't know what you are talking about. A lienholder, that is not
exercising their right to escrow collection, can only require a
"Certificate of Insurance" and it is a simple matter to call your
insurer and ask that one be sent. It will be, at no charge to you.

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,

I doubt it. You are advised by the mortgage holder that the insurance
and taxes have been paid for the term on the escrow statement. You
also get a notice from the insurance company, both a copy of the
billing and notification of payment. The mortgage company does not
have the right to make you change your policy, only the right to make
sure you have the stipulated coverage in place by a qualified insurer.
They don't pick the company you are insured with, you do. If you want
to change, you can, you just cannot go without.


as some mortgagors pay mortgage insurance for the life of a mortgage
because they don't pay attention to their rights under law/regulation.

As said it is automatically eliminated at principle balance reaching
the 80% mark. I believe that is currently federal law, but could be
wrong, I've been out of the business for a while.

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.

Unusual comment, most are just trying to make and sell a better
product than their competitors so that they can remain profitable and
stay in business at the will of their owners, the stockholders, which
could be you. That was my position and the position of most in that
category with whom I was familiar.

Ethical conduct is not a given in business.

nor is unethical conduct, but that is why there is oversight and
regualtion.

--Vic