Should I sue my bank??? They took my money!?
by Mortgage Rates on Wednesday, October 13th, 2010 | 5 Comments
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The bank was correct in charging you for PMI (private mortgage insurance). You don’t have a case.
“They applied the money to my loan principal”
That is good news. It means you have less money you owe and less interest you will have to pay on that money.
I would call my mortgage company, talk to a manager, explain the situation and tell them that I do not wish to have the refund applied to the principal. They have to have a system to be able to issue you a check rather than a credit on the loan – especially since this was all their fault! Banks deviate from their “policy” all the time – this would be a perfect example of when to go against the policy! I agree that this is outrageous – I am so sick of the banks doing whatever they feel like with MY money! As long as you are not late on your payments, I think if you can talk to the person who can actually authorize such a refund, you have a chance of getting it. Good Luck!
Julie H., she isn’t talking about PMI, or did you not even read the question? She’s talking about HOMEOWNERS insurance.
You’re going to have to get out all those pages of paperwork that you got when you applied for your mortgage and when you signed the final papers. Somewhere in there will be a discussion of escrowed funds, and what happens to adjust your escrow balance if too little or too much is escrowed for taxes and insurance. You need to read that and see if your loan agreement says that they get to apply excess escrow to your principle. If your loan agreement says they can apply it to your principle OR adjust your next year’s escrow, OR give you a refund, then you’ve got the basis for a complaint. But if it only says that they will apply excess to your principle, there’s nothing you can do to get a refund.
In most states, your state bar association can refer you to a local lawyer who will do a free 30-minute initial consultation. Get your loan papers together, plus any notes or correspondence from your insurance company and your mortgage company about this overage. Schedule one of these free consultations and let a lawyer look over your documents to see if you have a claim. You can also try looking in the phone book or online for Legal Aid in your city.
Those loan agreements are page after page of fine print and legalese and it can be danged near impossible to figure out what they really say. Your best bet is to find a lawyer who can interpret the documents for you and determine whether you have a claim.
You need to get this seen by a good lawyer to know more.
They are not allowed to do what they want with your money, especially when it was their mistake.