Consumption and Real Estate
It is illegal for a bank to change raise my FIXED mortgage rate?
Question : It is illegal for a bank to change raise my FIXED mortgage rate?
Recently the bank that my mortgage loan is through went bankrupt. My mortgage loan was transferred to Bank of America. Initially, i had a 30 year fixed mortgage rate and now B.O.A is saying that my payments are almost 500$ more than they initially were. Is this illegal for the bank to do this?
fixed mortgage
Best answer:
Answer by Realtoratheart
No they can’t change your rate if it truly is a fixed rate loan. I would make sure of that first. Then if you are sure, I’d file a formal complaint with the Federal Trade Commission.
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#2 written by spalmer 1 year ago
Your interest rate hasn’t changed, but your insurance and/or property taxes could have. Do you know what your insurance is yearly? Do you know if your property taxes went up this year? My mortgage rose $ 55/month due to an increase in both my homeowner’s insurance and property taxes this year. $ 500/month is outrageous though, so you need to do some investigating.
To answer your question… a bank cannot change a fixed interest rate.
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#6 written by Simpson G 1 year ago
Call the bank and ask them why the payment changed. As another person mentioned, it may be an escrow issue. The mortgage company on one of my homes was also absorbed by BofA, but nothing changed. I do not escrow as I choose to make my own insurance and tax payments. I DID, however, get a notice from BofA tht I needed to update my insurance information with them or they would supply insurance and include that in an increased monthly payment.
Unless you defaulted on payments, the purchasing bank cannot change your interest rate. Again, call the bank and find out what’s going on.
Read this: http://www.creditfyi.com/Loans/Personal-Loans/what-happens-if-your-bank-goes-bankrupt.htm
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You were probably low in funds in your escrow account, for this reason yes they can raise your rate. It is explained in detail at http://badcreditmortgagerates.info