Mortgage with same bank as Checking/Sav--should I be concerned?

[rjsdsu]

My mortgage was with CW, but now it is with BofA. My Checking and Savings is also with BofA. My paycheck is direct deposited into my BofA checking. Also, if you are familiar with BofA's "my portfolio" it is where I have all my other assets/liabilities tied into and it shows my real time net worth. Is there any concern here? I suspect they cannot put a hold on my checking, but thought I would ask. Or do you suggest I switch banks to maintain a complete separation? I stopped making mortgage payments in December.

[AngelinaCatHub]

Yes, I'm sorry to say, you have some concern. First upon the "suggestions of bankruptcy" is mailed your checking could be closed. Mine was but I have a CU not a bank. I'm not sure of B of A. I would subtlety, withdraw your funds into another location.

I don't wish to alarm you at all, but do a search here on what can happen. I've seen many posts like yours. B of A can be tough.

How late are you on mortgage? What is your intent? Pay through or let go? This has a lot to do with what may happen. If you wish to keep the place, talk to them. This could buy a lot of time or forgiveness. If you wish to let go, Move your accounts, first with direct deposit. Only my opinion. 'Hub

[DeadManCrawling]

Complete separation is the only semi-safe avenue.

This board is littered with posts from folks in your exact situation.

They stopped paying a loan, a mortgage, a car payment, or whatever.

Boom

One day, they go to buy something on their debit card.

Account balance ZERO.

Why?

The bank had cross-collateralization rights. In short, they can clean out any and ALL accounts you have with them to pay your delinquent mortgage, car payment, etc.

Very dangerous. And most people have no clue they are exposed like that to begin with. You will find the small print (VERY small print) on page 123,889,743 of your agreement, if you flip it over, hold it to the moon on the third of the month, while the temperature is below freezing, and as you gently blow grapefruit juice across the page.

Seriously, it can be nearly that bad.

Protect yourself.

Best,

-dmc

[rjsdsu]

We are 20 days late and intend on going into foreclosure unless they offer a very generous modification.

[justbroke]

As DeadManCrawling eluded to, cross-collateralization is bad, but that's only used at Credit Unions. The "Right of Setoff" is the thing you should fear most! This allows just about every bank (and even utility companies) to use your Deposits (in deposit accounts) to "set off" the balance on any loan that is closed. I learned this the hard way myself! I had (3) three checking accounts and a line of credit at one bank. I thought it was safe, because I didn't even list that bank in my petition. Then the VERY NEXT DAY after filing, they closed the line of credit and offset the balance with my checking account. That was not a good day... it caused several checks to bounce and amongst other issues. C'est la vie. Been there... done that.

So be safe... do not have deposit accounts (whether demand or timed) where you have credit accounts. That simple.

[LimpDisc]

I BK'ed a line of credit with Bank of America. I made sure my checking\savings accounts had only $100 between them after I started to miss payments.

[ItsJustMe]

We BKd a BofA mortgage and have a checking w/them. We stopped direct deposit, but kept a few hundred in the account to cover some auto withdrawls. They never touched the money (it wasn't enough to satisify the payment). So, for us at least, we were able to keep the account open and unsure if they would have touched the funds if there was more in the account.

We are past 341, does that mean it is 'safe' to go back to BofA? We hate the bank we switched to.

[debbie42]

Yes, you need to open a new account elsewhere and move the money, before filing. Bank of America in my opinion, is a horrible bank to work with, in general and I had no problem telling them that the day I closed my account and took the money elsewhere.

I opened new checking and savings accounts first before closing BoA's, just to be sure I would not have a problem opening one. They do credit checks.

Our lawyers said they can and will absolutely seize funds from our bank accts to pay our credit card and equity loan we had with them. Good luck.

[rjsdsu]

Thanks all!

I set up Etrade checking and savings yesterday. Everything should be moved by end of week and direct deposit will now go into etrade. Setting up all my recurring payments and bill pay via Etrade was painless. I did like BofA and especially their my portfolio features, but I am doing that on Mint. I have to say, Mint is pretty cool and the "feel" of the website is great. I plan to keep my Bof A accounts open with a hundo or so because my guess its helps/won't hurt my credit having those accounts open 10+ years.