foreclosue attorney fees charged

[vrock]

What is the name of your state? Ohio
We have had problems with past due payments on our mortgage. In Feb 05, we wanted to work out a loss mitigation with them and they said if we sent them $2,600 that would keep us out of foreclosure. We sent the money and they started foreclosure proceedings anyway. In the meantime we worked out a repayment plan with them. They took $1,800 of the 2600 & used it for their attorney fees. Is this legal to use our payment money for their attorneys? I think it is at the very least, unethical.

[pty]

Originally Posted by vrock

Is this legal to use our payment money for their attorneys?

I used to work for a mortgage company and spent several years in the loss mitigation department. When a loan goes into foreclosure and a repayment plan is agreed on, it is legal (and the norm) for the attorney fees to get paid first. The company should have told you how the initial payment on the plan would be disbursed (ie $1800 for attorney fees and the remaining to be applied as payments). It is also legal (and the norm) for the foreclosure process to continue until the mortgage company has the initial repayment plan money in hand. Once they received the money, the file should have then been pulled from the attorney office and the foreclosure stopped.

So I'm guessing one of two things happened:
1) you sent in the $2600 without arrangements for the remaining funds, and when they didn't receive any additional money, and didn't have an agreement for when the money would be paid, they then started foreclosure, which they can do
2) the file was actually already in foreclosure when you sent in the $2600

At any rate, yes, they can use the money to pay attorney fees. And if you don't have the repayment agreement in writing from the mortgage company, you need to ask them for that. Be aware that if you miss any payments on the plan, then the plan is void and the foreclosure process begins again.