Kelli your above questions are excellent inquiries on an important subject because mortgage serving fraud is particularly rampant in the **escrow and suspense** funds areas. I’ll explain how and why this area is so frequently a prime area for criminal deception later if you’re interested.
Only 2 months ago Bear Stearns and its subsidiary, EMC Mortgage, agreed in principle to pay a $28,000,000 fine to settle Federal Trade Commission (FTC) charges that they engaged in unlawful practices while servicing consumers’ home mortgage loans. Additionally they currently face class action litigation the size of the national debt.
EMC/Bear Stearns has improved somewhat due to colossal class action, FTC fines and mandates, and members of their top hierarchy being arrested. But Moose is accurate in asserting that they are true “predators.” Although they claim to have sent communications admitting errors on our loan to credit rating agencies and even offered me a tiny refund check (which I rejected) I still rate Bear/EMC as the ultimate Satan of mortgage fraud. Certainly arch mortgage fraud criminal Greg Fedler who was an EMC “Customer Advocate” (Har-har) is the most dishonest human being I have ever encountered in 64 yrs on this earth.
1) There’s nothing wrong with asking them to “Produce the note” but I suspect the reason they accelerated your note is that you may have withheld payment pending the outcome. Did I guess right? Always keep your payments current no matter how blatant and easy to prove the fraud becomes.
2) Now that you have a revised “beautiful payment” as you call it I assume you can make additional principal payments. If that’s the case send in your principal payment for December for example as $108.12 and note it on both sides of the check as for “Principal Only.” Put that in a cover letter as well. In January your extra payment would be $109.01 and in February 2009 it would be $109.02 and so forth. In the early stages of a mortgage loan the “rule of 78ths” provides enormous advantages for sending in extra principal payments in the early stages of a loan. Such is not the case in the final stages of your loan. Btw I suggest you send both payments in the same envelope. EMC has deposited one check and withheld the other a dozen times with me. (Documented true story) If you send the regular and principal and escrow payment all in the same envelope you have an improved means of keeping an eye on them.
3) Same goes for your regular payment: Specify it clearly front and back as, “For Regular Payment Only.” I always sent mine in 2 weeks in advance. EMC used to have a nasty habit of misplacing or recording payments late. Consequently I recommend this monitoring model: For example a $958.92 regular payment becomes $959.12 for your December payment and so forth. The extra few cents is miniscule and it goes to principal anyway. Try this and you will thank me for this unique technique of keeping an eye on what EMC does with your money.
4) Now on to this crucial element of your escrow account and suspense accounts. This is where the rubber meets the road on carefully designed schemes of stealth robbery of trusting mortgage borrowers. Demand statements every month; ask for detailed explanations of suspense and especially escrow accounts or the dreaded “corporate advances.” (Another name EMC uses to hide mortgage fraud.) Call them and write them asking for an explanation and documentation of these side charges. Quite frequently they are fraudulent, sometimes nonexistent (Drive by inspections) or grossly inflated. Will they comply? No way Jose! At least not at first but polite persistence will eventually pay off. They may tell you the escrow charges are settled up at the end of the note but that’s only a ruse to sidetrack your determination. They will (very likely) ask for a written request. If so fax or send in your written request immediately and call back to see if they received it. Stalling is used on a daily basis by EMC and so many others. Mortgage fraudsters like EMC/Bear still use the fact that time tends to somewhat defuse determined aggression. At the very least they will cease or sharply curtail this abuse of “escrow accounts” and “corporate advances” on your account that are favorite method to cheat customers. I personally haven’t had any sort of these hidden charges in an estimated 18 months.
5) Finally I must give you an “it depends” answer on your question about sending in escrow payments and the like. If they have forced you into a default position or you are ever in a foreclosure process you must temporally make the escrow payments to avoid really getting into a mess even if you know they are fraudulent or inaccurate charges. The good news is that most of these “escrow” and “corporate advances” do not really have to be paid immediately but beware: EMC has a well established record of issuing fraudulent extra charges and then using your regular payment to force-pay the bogus charges. Naturally this puts you in a late charge/default area and they don’t always tell you right away! Call them first but if they are unrelenting on the “escrow charges” you must pay them to avoid trouble. You can make a case afterwards that the escrow charges or “advances” were unjustified, undocumented, or inflated.
6) You can make the very reasonable request to see all of your “suspense, escrow” and “corporate advance charges” but I can guarantee you EMC will not comply without a struggle. ..And with good reason: These hidden, murky unspecified charges are fertile areas ripe for crime, intentionally inflated charges and fraud. That’s why they are currently in so much trouble at Bear/EMC. JPMorgan set aside $6,000,000,000 to deal with problems like this and the inevitable litigation.
Like Moose I’m not a lawyer but my advice comes from front line experience in the trenches with these scoundrels.
1804 Cross Bend, Plano TX 75023