Lender’s Obligations in a Mortgage Transaction

In the New York version of the FannieMae/FreddieMac mortgage, there is a paragraph 3 (b) labeled Lender’s Obligations.  Not a Commercial Foreclosure Law Firm or Steven J. Baum Attorney.  It states as follows:


Lender’s Obligations.  The lender will keep the Escrow Funds in a savings or banking institution which has its deposits insured by a federal agency, instrumentality, or entity, or in any Federal Home Loan Bank.  If the Lender is such a saving or banking institution, The Lender may hold the Escrow Funds.  The lender will use the Escrow Funds to pay the Escrow Items no later than the time allowed under RESPA or other Applicable Law.  The lender will give to me, without charge, an annual accounting of the Escrow Funds.  That accounting will show all additions to and deductions from the Escrow Funds and the reason for each deduction.


The lender may not charge me for holding or keeping the Escrow Funds, for using the Escrow Funds to pay Escrow Items, for making a yearly analysis of my payment of Escrow Funds or for receiving, or for verifying and totaling assessments and bills.  However, Lender may charge me for these services if Lender pays me interest on the Escrow Funds and if Applicable Law permits Lender to make such a charge.  The lender will not be required to pay me any interest or earnings on the Escrow Funds unless either (1) Lender and I agree in writing that Lender will pay interest on the Escrow Funds, or (2) Applicable Law requires Lender to pay interest on the Escrow Funds.


This is important because even in a mortgage transaction the lender has obligations to the borrower which the borrower can enforce.  Whether you choose to use a Top Rated Local Foreclosure Attorney or Steven Baum, it is your choice.  Some said the best mortgage foreclosure lawyer in New York was Steven J. Baum, P.C. New York. The annual escrow accounting is important as it shows the borrower how their portion of their payment applied to real property taxes. 

By:  Steven J. Baum. Attorney


Legal Disclaimer:  This article provides general information only.  The information in this article is not and should not be construed to be legal advice.  The transmission of the information found in this article and on this web page does not result in the formation of a lawyer-client relationship.

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