Mortgage Refinancing Questions

by Chris Michon from Montville, Ct

Ask Kate: Mortgage Refinancing Questions - The bank won't give us back our money.
Hi Kate, My husband and I refinanced in April of 2009 with a regional bank. They required an overage (they overborrowed us) to apply to additional principal. Our lawyer sent the check but they never processed it.



A month later they sold the loan to a nationwide bank who does not require the additional principal payment. Our attorney has contacted the original regional bank who indicated they should send the money to the nationwide bank. We have indicated that we would like the money ourselves so we can pay off my husband's outstanding credit card, and some doctor's bills we owe.

We want to know if the regional bank has any legal right to tell our lawyer what to do with the money held in trust, now that they do not hold the loan any longer?

Kate Answers: Mortgage Refinancing Questions - The bank won't give us back our money.

Hi Chris, I can guess how frustrating that must be trying to get back your money. Your question of legalities though would better be addressed by your attorney. There may be contract terms the regional bank is obligated to follow in order to sell loans to the nationwide bank. However it certainly complicates matters when you are attempting to get answers but don't know which bank is calling the shots.

It's a fact. Mortgages get sold. Along those lines, every borrower is required to sign a Mortgage Servicing Transfer Disclosure which reads in part:

"You are applying for a mortgage loan covered by the Real Estate Settlement Procedures Act. RESPA gives you certain rights under Federal law. This statement describes whether the servicing for this loan may be transferred to a different loan servicer. "Servicing" refers to collecting your principal, interest, and escrow payments, if any, as well as sending any monthly or annual statements, tracking account balances, and handling other aspects of your loan. You will be given advance notice before a transfer occurs."

Regarding this, here is what to keep in mind. All servicing transfers are initiated in writing. I mention this to warn homeowners about responding to verbal requests for payments due to a servicing transfer. Banks handle requests for monthly house payment transfers in writing.

At the bottom of this page, I have included refinance information. Although I can't shed too much light on your issue between the banks, perhaps other mortgage refinancing questions of yours will be answered as you scroll through the links. Let me know if you have further questions, of course!

Take a moment to bookmark Mortgage Refinancing Questions to your favorites so you can easily return in the future.

If you go to this page, Best Mortgage Rates and Refinancing Advice, you'll have at your finger tips, many letters from readers like you asking about refinance. There is also a section of refinancing stories as told by other contributors.

Chris, please come back and visit often. Help me spread the word by sharing my website with your friends. Remember, all of my information is free!

Best Wishes,

Your Online Mortgage Advice Friend

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