If you are a seller who is in default – i.e. you are starting to miss your house payments – and you happen to bank at the same place that services your mortgage, please pay attention. The bank may have a right to seize the funds in your account to pay your late mortgage. For example, if your mortgage is with Bank of America and you have a checking or savings account with Bank of America, they have the right to take those funds out of your account without your permission to pay the mortgage. You have no choice. If you need money for clothes, food, gas, whatever, too bad. It’s there’s.
Here’s a tip…open a bank account or two right away. Make sure they are not with the banks that hold or service your mortgage(s). Move your money out of the bank that has your mortgage. It’s your choice whether you keep that account open or not, but I think most banks today are charging $6-8 per month to keep an account open – because it’s such a privilege you know to bank with XYZ bank.
So, if you are behind or thinking of doing a short sale, please pay attention to this immediately for your own sake. The banks will eventually take back every dime they can get their hands on. That giant sucking sound is not jobs going to Mexico like Ross Perot once said, it’s the mortgages sucking away all of your money.
Be smart and good luck!