Paying Your Mortgage with Money Order is a Bad Idea
Posted by Robert Weed / in After Bankruptcy, Blog, Chapter 13, Weekly Posts /
Paying Your Mortgage with Money Orders is a Bad Idea
Handing somebody a money order to buy a car or something–that’s sometimes safer than cash. But mailing a money order to pay your mortgage–that’s almost always a bad idea.
Norman mailed Selene money orders; now he can’t prove his mortgage is current.
Let me tell you about Norman. Norman filed Chapter 13 bankruptcy with different lawyer. He later came to see me in a panic. Selene, his mortgage company, has started to foreclose. “So have you paid on time for the fifteen month since the bankruptcy was over?” I asked. “Absolutely,” he replied. That was Friday. Sunday afternoon, he sent proof. Eleven cancelled checks and four sets of Western Union money orders.
We need to move quickly to stop that foreclosure but I don’t really have proof he made the payments. The cancelled checks–they show Selene got them. But the money orders; who knows where they actually went.
Getting Proof from Western Union
We are sure glad Norman kept his receipts. Western Union money orders have form on the back he can mail in–with $15.00–to track if the money orders were cashed. And by whom. That will be a total of $240 to track sixteen money orders. (Western Union money orders are limited to $500; so Norman needed four money orders for each mortgage payment.)
If they haven’t been cashed, he can get his money back. If Selene cashed them, we can prove the mortgage is current. Meanwhile, the clock is ticking toward foreclosure. Because Virginia foreclosure law was changed a few years ago, we do have enough time to work with. But no time to spare.
Selene Violates Regulation Z and Makes This Problem Worse
When Norman filed for Chapter 13 bankruptcy, Selene stopped sending monthly to him. As far as I can tell, that’s their national policy. (I’m suing Selene because of that.) Regulation Z requires mortgage companies to send periodic statements. And expressly says that bankruptcy is NOT an excuse to stop sending statements.
If Selene had sent monthly statements, Norman could have seen right away if the money orders weren’t being properly credited. When the case was over and Selene started sending statements, Norman couldn’t figure out what was going on. We went to the Selene website to download the past monthly statements. But they would only give us six months of past statements.