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32 Comments on MORTGAGE LENDER TAKING MONEY FROM YOUR BANK ACCOUNT WITHOUT NOTICE
Richard, I just came across a situation where the County garnished a bank account for back taxes that are delinquent. I guess they can get their money anyway they can.
I'm wondering if that's legal. I'm sure most people don't read every line in their loan document agreement and I doubt that many people even ask the MB or banker to explain it to them when they close. I'm also wondering if the language makes it difficult for a consumer to even understand if it's mortgage jargon. I would hope a person would want an attorney to review that type of clause before they would commit.
Wells Fargo has done this to me when I was 2 months behind back when we were having hard times in 2008. I finally closed up shop in my Wells Fargo accounts November 2011 when they misapplied my home equity mortgage payment not once, but TWICE in fear that they would take out those two payments I made X2. I had the money for the payments I made but not for their mistakes if they would have taken it out times two.
If you have this provision in your contract and you bank where you have loans out - beware. They will NOT hesitate to wait to clean you dry and they do not care if you have gas or grocery money for the next two weeks.
Whoa...that is completely wrong. I do not believe that they can take another's money, even a minor. I'd contact an attorney if this happened to me.
I think just another good example of the most powerful banks having too much power. I'm sure it was done all legally ... but ethically ... no. Not by a long-shot ...
Great lesson to teach a 15 year old, huh??
Gene
Hi Richard, they have really reached new lows in banking. They are not the great institutions they once were. And yet , they had their hands out for the bailout money.
They have the right and they will do it every time. .
One of my first advices to my customers considering a short sale.
I am hearing of this happening more and more often. It is reason to be alarmed. More needs to be disclosed from the bank upfront before anything like this happens. Sorry :(
Richard -- thank you for the update on how banks are trying to get all the money they can from anybody they can.
Yikes..... That's about all i can say. Interesting post.
If you want a friend, buy a dog. Banks' commercials about how they are your friend for life do not count.
lawsuit
I have heard of this happening to others. I believe it is legal because when you open an account there's a small book you're given in tiny print and it probably says there all the bank's rights and you have none, and you the account holder agree to it. I know Wells Fargo a couple of years ago was pushing for account holders to open up accounts for their minor children, so they could learn about banking. How ironic!
This happens all the time if you have a savings or checking with the mortgage holder...be very careful...very, very careful.
Never mix business with pleasure. And, always keep several bank accounts in several different places in my motto.
Yes, this happens all the time. The first thing I tell my clients is to remove all their money from any accounts that are owned or have a relationship with their lenders or even used during the loan application process. Then we keep a low balance for the short sale approval and close those accounts once the short sale is approved and about to close.
Banks have always had the right to take money from a depositor to cure delinquency of debt owned by that depositor. No notice is required.
I question how the money held in trust for a minor can be used to offset the debt of the parent. The minor is not a debtor and the assets of the minor should be beyond the reach of the creditor.
Hey Richard,
Thanks for the post. In addition to teaching the 15 year old fun lessons on saving, the 15 year old also learned the Proverb that the borrower is servant to the lender. Separate the funds.
Best of success to you this year!
>>It is also strange that the lender would not let the custodian close the account.
Your article said it was the "bank", not the "lender".
I am surprised that the bank would risk the publicity hit that this could lead to if it were reported beyond AR.