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Home >> Lending >> Home Mortgage
Mortgage Payment Taken and Cashed by Wrong Bank
I received a notice of intent to accelerate from my mortgage holder. I sent a payment to my original mortgage holder for insurance back payments and the March payment by Express Mail to the address provided by the bank. I was all paid up. The Post Office forwarded it to a different bank, and the second bank cashed the check. The money is gone. Meanwhile, the original bank folded and was bought by a third bank. Now, they say they did not get the money. The original bank didn't get it; the new mortgage holder didn't get it, and another different bank apparently took it. I do not have any business or account with the bank that cashed the check. What do I do? I called the bank that took it, and I am going to request a review, but what do I do if they do not acknowledge that they cashed it? I have a time limit from my new mortgage holder. What responsibility does my own bank have from cashing the check to the wrong payee? What should I do?
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 Get legible copies of the front and back of the paid check from your bank. Ask the bank you made the checks payable to to provide an affidavit that it did not endorse or benefit from the check. The affidavit and check copy then accompany your claim against your bank for improper payment. Your bank, in turn, makes a claim against the bank that endorsed the check, based on its warranty of presentment and transfer, and based on its endorsement.
That can take some time. You need to keep your current mortgage holder apprised of the problem and the steps you are taking to resolve it. If you can find a way to make a payment to the new mortgage holder while awaiting reimbursement (that may be overly optimistic), you should do so. You should probably have made that wandering check payable to the current mortgage holder instead of the original mortgage holder. When you get your money back, make the payment again, but send it to the right party.
Published on BankingQuestions.com 3/23/10
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