Legal Question in Real Estate Law in Texas
Can a mortgage company hold my payments hostage?
I have two questions.
Q# 1) Can my mortgage company keep my last two months payment and not apply it to anything?
We have been consecutively 30 days late, but never more than 30 days late, since February. We let our HO insurance lapse as of May. They applied Haz. Ins. to our note making it $111.00 extra a month. We have not paid two of the $111.00 monthly, but have paid our P&I. They have kept our P&I and will NOT apply it to anything. Now, they are saying we are 90 days past due and are wanting to foreclose unless certifiable funds are received by 8/6.
Q# 2) If I do not make anymore payments and find another mortgage company who will buy the note, is my mortgage company required by law to accept the buy-out of the note from this other mortgage company.
Thank you for your time.
1 Answer from Attorneys
Re: Can a mortgage company hold my payments hostage?
The terms of the mortage govern the answers to both questions. Without the mortgage to review we cannot give specific answers. However:
1. Usually the mortgage holder is not required to accept for application to the loan any payment which is less than the monthly amortization called for in the mortgage. Also, there are usually late charges for delinquent payments which, when applied to a late payment, reduce the payment amount to a point which the mortgagee is not required to accept. They are, however, obligated to return any payments which they decline to accept.
2. Another mortgage company should be able to easily pay off the first mortgage if it hasn't been declared in default, although there may be additional charges in the form of late charges and interest added to the pay-off balance.
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