National City Mortgage Hiked my payment 60% overnight--far beyond the range of affordability--due to escrow shortage which NCM neglected for more than a year Dayton Ohio

Just after 9-11, I refinanced my 30-year-old home with National City Mortgage to get a lower interest rate. That's when the trouble began.

Although this refinance reduced my payment because the interest rate was lower, what I didn't know was that NCM was neglecting the escrow balance which went in the red almost from the outset.

The value of the house did go up, which increased the taxes. And the insurance went up as well. But when these higher-than-calculated-for tax and insurance bills showed up at NCM, they simply paid these bills without questions, and without any regard for the fact that my escrow was going thousands of dollars in the red.

During this time, NCM never sent me a bill or letter, or called asking for more money along the way. After a year and a half of this inaction by NMC, they finally did bill me for 6 house payments in one lump sum.

Of course, mobody could possibly pay that much. If a customer had that kind of money lying around, he would be making extra payments along the way to build equity.

Four business days after the 6-payment demand letter arrived, NMC notified my in writing that they were hiking my payment 60%, pushing it far beyond the range of affordability.

My payment went from $870 to over $1300 overnight. The most Fammie Mae says I can afford is $1000.

As a result of this matter, I had to borrow money from my 401K just to have enough on hand to make the payments and not lose the house. They failed to bill me in a timely manner, and delayed such billing for some 18 months until the bill was too high to possibly pay.

I wondered if there was no red flag in their system which warns that an account is going in the red, or if a bill is higher than a particular consumer can afford. Turns out there is just such a red flag, but NCM won't admit where it is.

I asked NCM the question, "What if a $1 million tax bill were to arrive? Would you just pay it without question, run the account $1 million into the red, and hike my payment from $870 to $95,000 per month?" They said they would not do that.

I asked the same quesiton again, this time using the figure of a $500,000 tax bill. Would they just pay that one without question. They would not. Such a high bill would throw up a red flag.

At that point, they didn't want to continue with that line of questioning. I believe any reasonable person would agree that NCM should have set the red flag at Fammie Mae, which is the maximum amount the government says I can afford. Or at the very least, as soon as the account went in the red, they should have been on the phone with me right away.

Honestly, in real life, how far does any other account have to go in the red before the creditor starts calling you? One time I missed a $20 cerdit card payment, and the bank called me at work wanting their $20.

NCM has finally admitted in a recorded phone call that they actually should have billed me at least a year earlier than they did. This partial admission of guilt on their part is of little comfort since I'm now having to file bankruptcy just to keep them from taking my house. I have talked to a civil attorney who says I need to file suit too.

The most I can recover in a lawsuit is 3 times the value of the house. And I'll need every penny of it since I'll have a bankruptcy on my credit report for 10 years as a result of NMC's negelegence. I'll need enough money on hand to make sure that I'll never be in financial lack again over that 10 year period--no matter what may befall me--since bankruptcy will not be an option during that time.

So consumers beware! It's possible for you to make every payment in the book, and pay every bill that shows up, and they can still take your house, and keep all your money too. It should not be legal. But it is.

Until the laws are changed, we will each have to sue the mortgage companies on an individual basis.

James
Carrollton, Texas
U.S.A.

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