Can a mortgage company that is holding more than enough in equity account to pay taxes on a mortgagee's property refuse to pay it? Thought that was what it is for. This particular company told these people that they weren't going to pay the taxes out of their equity "because it will make the company short on funds." (This is someone we know, not us - - we have had no problems.) Can they do that?

The people told the mortgage company to cough up a check to them for the amount to pay taxes or they'd take them to court and notify the Attorney General Consumer Affairs - - so the company did, finally.

What's the deal?

Gee Dow, are we talking about HOME EQUITY or an ESCROW ACCOUNT from which taxes and insurance is paid from?

If your answer is HOME EQUITY, no a mortgage company cannot strip the equity UNLESS the unknowing HOME OWNERS signed such a contract allowing them to do so. Then, that money has to be used to pay down on the interest and principle thereby giving control to the Mortgage company of the property. I hope that fraud is not what is going on.

The ESCROW ACCOUNT is usually only used for taxes and insurance if it is set up that way.

I'm not the final answer on this, but the first thing I would recommend is organizing any paper work in chronological order and read what has transpired. If the owners have had any recent dealings with "a" Mortgage Company that will be the document that will tell you. Escrow and equity are two different things.

Seasoldier/ All types of crooks are in this market.

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Seasoldier/Additional information. And our leaders made us bail out those guys.

Sorry - I meant escrow account...my bad.

Anyhow, they got their money and paid the taxes, put the rest in an "escrow" account in the bank, and will pay their own taxes and insurance. The company? Countrywide.