Escrow Shenanigans

[Mike]

Wow, I contacted my lender to discuss modification options then got the bait N' switch type I never even heard of before. Here's my background:I bought a brand new home in 2004, and got into a bad interest only jumbo loan with my eyes open. Then I refied in 2005 but maintained my 20% equity. As the 2 yr interest only period expiration approached I lost 14% of my income due to my employer changing my job status. My solution, find a new job and increase my income, which I did. Thus, when my 2yr (pre-payment penalty and interest rate increase date) period ended I was in position to continue to make increased payments. My loan amount is $750K and my payment was $3,900. My payment increased to $5,800 as my interest rate jumped from 6.3% to 9.3%. I've been making the increased payments and I haven't missed any, but the 14% earlier income loss and high percentage of money that goes to my mortgage means that I haven't kept up with the taxes on the house, which I'm behind on. Taxes are approaching $900 per month. My solution was to refinance. Of course, by then because of short sales and foreclosures in my area, values have dropped. Instead of the $950K appraisal I had when I refied in 2005, my recent apprasisel is $775K down 19%. Basically my 20% equity is gone. My credit score is decent at 650, but without the equity I haven't been able to refinance, and my jumbo loan is beyond the FHA limits so I can't refi through them either. Then, while working with my lender to go into one of their two mod programs (reverting back to my original interest rate - 6.3% for a 5yr timeframe) they began to change the terms of their own program. First I was told they would only go to 7.8%. Keep in mind I've been paying them interest only payments for almost 4 yrs now, with no reduction in principle, meaning they have made a lot of money off of me. Next, I was told they would reduce the interest rate to 7.8%, but would require me to pay back the taxes they paid off via my escrow account through an "advance". I said (via e-mail) what advance?!?!? I don't pay my taxes and insurance via escrow. I never had. I hadn't asked for any advance, nor was I notified there would be one. Now, they are saying they will lower my payment but also charge me $3,000!!! per month on top of that to cover the $24,000 advance they paid!! Because the "advance" happened during mod discussions I was having with them I feel like they paid off my taxes as a tactic to charge me more. Also, I've never heard of such an action......I have yet to hear back from them regarding the detail surrounding this "advance" Basically, they are asking me to pay a total of $5800 per month, which just so happens to be what I'm paying them now.....