Are banks allowed to freeze securities?

[tomg600]

What is the name of your state? PA

I had a bank account with a local bank, and they gave me a second mortgage but did not require me to pay off my first lein -- and cut me a check. I paid off a great deal of unsecured debt, car loan, home improvements and placed 12k in my bank account for use to satisfy the already started contracts on my windows, siding, installation and addition. Then I placed 20k into 4 5k mutual funds with the banks investment advisor. After a month or so, the bank took the 12k in funds out of my checking account and placed it on the loan, then also cashed out the 20k in mutual funds without my consent or knowledge (and at severe penalty) and have them frozen in a 1% money market that I cannot take the funds out of. I was wondering if anyone could help me to find out the legality of this situation!

Thank you!

Tom

 

[vrzirn]

Start by reading all the fine print on the second mortgage contract. Ask the bank to explain any clauses you do not understand.

 

[JETX]

It is likely that you are either behind in some payments or there was some overpayment made to you by the bank where your accounts are located. (Your post implies that there was something 'fishy' in the loans.).

As such, the bank has the right to correct the problem by debiting any other asset accounts you have at that bank. This is covered by the loan agreement.