What happens to the money I have paid my mortgage lender for taxes and insurance now that they are in a BK ?
Our mortgage lender has filed for bankruptcy. Our payments to the mortgage company include principle, interest, taxes and insurance (PITI). What happens to the money we have paid towards taxes and insurance ?? Since we have paid this money in advance with our payment, is the bankrupt mortgage lender required by law to pay them? If they don’t, due to bankruptcy protection, are we responsible to pay the money that has already been received by the mortgage lender?? In other words, lets say we have made payments totaling $10,000 over the last 10 months, $2500 of which is taxes and insurance. If the mortgage lender does not pay the $2500 to the insurance company and to the IRS, do we have to come up with the $2500 to pay what the mortgage lender did not ??
Our mortgage lender has filed for bankruptcy. Our payments to the mortgage company include principle, interest, taxes and insurance (PITI). What happens to the money we have paid towards taxes and insurance ?? Since we have paid this money in advance with our payment, is the bankrupt mortgage lender required by law to pay them? If they don’t, due to bankruptcy protection, are we responsible to pay the money that has already been received by the mortgage lender?? In other words, lets say we have made payments totaling $10,000 over the last 10 months, $2500 of which is taxes and insurance. If the mortgage lender does not pay the $2500 to the insurance company and for property taxes, do we have to come up with the $2500 to pay what the mortgage lender did not ??
April 2nd, 2009 at 10:58 am
Uhh why would any mortgage company be paying the IRS? Your escrow account would be for insurance and property taxes which are paid to the city/county/state where the property is located .
Your escrow account should transfer to whoever buys your mortgage. But I would double check that the insurance and taxes were paid on their due date just to make sure.
April 2nd, 2009 at 1:52 pm
Check out this site, I’m sure they have the answer you’re looking for.
April 5th, 2009 at 9:54 pm
No whom ever or better stated who ends up holding your mortgage also accepts not only the stated payments, but the financial responsibility for the escrow that has been paid in.