Legal Question in Real Estate Law in North Carolina

Mortgage Payment Increase

Probably the mortgage company has the right to raise your payment if you escrow for taxes and insurance. Notice should be given, but I suggest that you pay the increased amount if it is justified. If it is not justified, then contact the mortgage company. Your documents need to be reviewed to determine the correct procedure for raising your payment.

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Pay it anyway, even if they "can't" do it without notice.

Not that I have a 'right' to give legal advice to you -- I don't, since I'm only licensed in Mass.

When you got your mortgage, somewhere in the fine print on the papers you signed, you agreed to pay not only the mortgage itself, but to "escrow" payments to the insurance company (and probably tax payments, too) as needed.

Well, how did you find out, anyway? They must have told you sooner or later! Even if they neglected to follow a reasonable notice procedure, you have an obligation to keep the insurance in force one way or another, and the extra they're 'charging' you is a forced savings plan to gather the money together to pay the insurance company. Your mortgage doesn't profit directly from the extra they collect! It is really for your protection as well that you have insurance, and, as I say, you have the obligation to keep the insurance in force, so the extra amount of the payment would be something you'd be stuck with, whether the mortgage company collects it from you or you pay an insurance company yourself.

You might ask them to prove to you that your insurance has increased, ask why, and maybe even shop around for another policy at a lower rate which sufficiently covers the house (sufficient to meet the agreement you made with the mortgage company, at a minimum, as well as sufficient to protect your part of the investment).

I think the issue of notice to you is a red herring -- something to ignore, not very important, I mean -- and there's no point to getting mad at the mortgage company for that.

But PLEASE don't rely on me or take my word for any of this! I'm not really your attorney and I'm not qualified (nor licensed) to practice in your state and give advice to people where you live!

Pay the increase

The mortgage company apparently did not change the loan payment but the escrow payment.If they did not give you proper notification, they cannot penalize you for failure to pay theincreased amount. They cannot charge you late fees or give you an adverse credit report.However, if the insurance increased, then you should pay an increase in the mortgagepayment to adjust for the increase.