Will I get my escrow money back from American Home Mortgage after refinancing?

Question

I refinanced 2 weeks before American Home Mortgage declared bankruptcy. They still owe me my escrow money (a new escrow account was created at closing with the new company). Is the escrow money legally mine and protected from the company's bankruptcy, or can the company default on paying it back? Thanks!

The AHM mortgage was paid off and my new mortgage and new escrow are already in effect with my new company. The procedure was the AHM escrow was to be refunded to us and we already have a new escrow in place. While waiting for the AHM escrow to be refunded to us, AHM declared bankruptcy. Is the escrow money legally mine? Continuing to make payments is not the issue--we are already paying mortgage payments and already set up a new escrow with the new company.

Answer 1

it is yours; now as to whether they kept it separate [in a client trust account like they should have] ...

tough to guess

might depend on state law in your state ... you'll have to google that for yourself.

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it is almost certain sure that the refi was recorded the same day or the next day ... you can check on this at the usual place, possibly online [land records ... just put your real name in].

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one thing's for sure ... your regular monthly payment is still due at the address you were told. someone will be taking care of that and they'll follow up if the money doesn't show up.


GL

Answer 2

The escrow balance *should* get transferred over to whoever the new lender is. Your loan terms (rate, payment, term, etc) should not change. If your escrow balance doesn't transfer or if anything on your loan changes, call and raise he**!!!

Escrow accounts are nothing but a piggy bank holding your money until your property taxes and insurance premiums are due (of course, there's no actual "piggy bank"--the mortgage company uses that money for their own purposes and then just pays the bill when it comes...yup, you're letting them borrow your money interest free)

Keep an eye on the mail for an announcement of who you should be making your mortgage payments to. It'll say something along the lines of "notice of servicing change."

Be careful, if you go over 30 days late due to lack of communication, your credit score won't care and you'll knock points off. So make sure you're on top of it and getting the payment to the right place.