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Is my mortgage illegal.

1 Answers. Asked on Mar 28th, 2013 on Real Estate - Florida
More details to this question:
I bought this house November last year it was 250,000 I put down 25,000 and financed 225,000 at 4.250% interest, my mortgage payment was 1,751.68 this included all taxes and insurances, the mortgage company called me after I had been in this house for 1 year and told me that i could refinance under the harp program lower my interest rate and my monthly payments, so I did and now my monthly refinance payments are more then my first mortgage was because they didn't include my windstorm insurance in my escrow in the beginning and no one told me that they were not going to do that, when they did add it in my payment went up to 1,878.60 to make up for a shortage in my escrow and after I pay down the shortage my payments will only be 2.74 cents less then my first mortgage, at closing my mortgage payment was 1,471.11, I would not have refinanced if I knew my new mortgage payments were going to be more or the same as my first mortgage,they told me that they don't track your insurances
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Answered on Mar 29th, 2013 at 4:42 PM

Mr Spenser,

I couldn't  say whether there was any actionable fraud , misrepresentation, or other violation of law which would make your mortgage "illegal" .    In residential loan closings,  there is a disclosure document called a "TIL" or Truth in Lending Disclosure. This document would show all the details of the loan including total amount due and payments on your LOAN, but it would not include escrows, so it is possible that your loan payment amount went down but that your escrows went up. Most HARP loans require escrow as an obligation under the mortgage which doesn't  relate to the NOTE (the debt).

Banks can and sometime do recalculate escrows so I suspect that  the actual cost of the ins and taxes increased. Also, I suspect that the Bank holding your old mortgage could have readjusted your  escrow which might have made your  total payment even higher if you had not refinaced.

However, there may have been a Truth in Lending. RESPA violation or fraud, but this would require further examination of the closing documents and correspondence, etc. to determine. Today, major Banks' lending policies are highly controlled to avoid this type of misunderstanding, but if you think there was misrepresentation or fraud, you should contact an attorney. 

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Real estate attorneys can help individuals, families and small business with all property-related legal issues. Buyers and sellers of residential and commercial real estate should work with an attorney to negotiate the terms of agreement; draft and review the contract; review related paperwork (such as loan agreements); clear existing liens on a property; and attend the closing. Lawyers can also assist property owners with addressing zoning/rezoning issues and appealing property tax assessment. Landlords and tenants should work with real estate law firms to draft and review lease agreement, handle eviction proceedings and resolve landlord-tenant disputes.
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