Right of Offset..Yet Another Trick Up The Lenders Sleeve

Reblogger
Home Inspector with Trace Inspections, LLC TN #17

I thought that this was something that everyone needs to know about  This is a "re-blog" of a post on Active Rain, the author is Bob Hertzog 

Original content by Bob Hertzog

Right of Offset..Yet Another Trick Up The Lenders Sleeve

Folks, this is scary stuff.  Yesterday, I received a call from one of my clients, telling me that her bank recently withdrew money out of her account to pay part of her missed mortgage payments.  We are in the middle of the short sale process, and she happens to bank at the same institution that holds her 1st Mortgage.

Banks have what is called a "right of offset", which allows them to take money out of your account, without your prior approval or knowledge.  The Comptroller of the Currency Administrator of National Banks says the following:

Generally, a bank may take money from your deposit account to make a payment on a separate debt that you owe to the bank, such as a car loan, if you are not paying that loan on time.  This is called the right of offset.

In some situations, the bank can exercise the right of offset without letting a customer know in advance that it is going to do it.

However, federal law limits what a bank can do in some cases.  For example, federal law won’t allow a bank to offset your deposit account to pay off your consumer credit card account.

As soon as I'm finished writing this post, I'm going to start calling my clients, advising them of this "right of offset".  Time to move your money!

If you are listing short sales, I would suggest you do the same.

Bob Hertzog 

Summit Home Consultants

www.foreclosureuturn.com

Copyright © By Bob Hertzog 2010 *Right of Offset..Yet Another Trick Up The Lenders Sleeve*

 

Comments (2)

Stephanie Reynolds
Integrity First Financial Group, Inc. - Santee, CA
East County San Diego Homes 619-838-4408

Pretty important information! Good choice for a reblog!

Aug 23, 2010 10:54 AM
Carolyn Kolba
Serving Mentor, and all of Lake County, Ohio - Mentor, OH
Keller Williams Realty- Mentor, Ohio

This is really bizarre.  It just figures that a new law trying to restrict some of the banks nasty practices takes effect, and all they do is invent new ideas to take advantage of their customers.  The game continues.

Sep 02, 2010 10:21 AM