Can the bank take money from my savings if I am in foreclosure? 26 Answers as of June 09, 2013

I have mortgage with the same bank that I have a checking and savings account with. I have been trying to sell my house for long with no luck, it will likely be foreclosed.If I am in foreclosure, can they hold my money back in my savings account and take it?

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Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
It depends if you have a right of set off clause with your bank.
Answer Applies to: Washington
Replied: 8/24/2011
Heupel Law
Heupel Law | Kevin Heupel
It depends on the bank, but yes, some banks and credit unions will take funds from your account. We always advise our clients not to bank where they have debts in default.
Answer Applies to: Colorado
Replied: 8/22/2011
The Law Office of Jacqui Snyder
The Law Office of Jacqui Snyder | Jacqui Snyder
Credit Unions can. Banks should not be able to unless you already had that agreement with them. I would advise to switch banks for your sanity.
Answer Applies to: Ohio
Replied: 8/18/2011
Law Office of John C. Farrell, Jr.
Law Office of John C. Farrell, Jr. | John C. Farrell, Jr.
The fact that the mortgage is in the same bank as your bank accounts should not any bearing on one another per se. To relieve that concern,a smart move would be to change banking institutions.
Answer Applies to: Massachusetts
Replied: 8/17/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
One of the biggest complaints that people have about credit unions and banks where they have both a loan and an account is that the bank or credit union takes money out of their accounts if they fall behind. In most cases your loan documents allow the bank/credit union to deduct from all assets that you have at the bank/credit union. If you know you may default or fall behind on this type of loan you should open up an account at a different bank or credit union and move your assets to another institution. It is a pain in the neck, but it is easier than having your accounts frozen and your assets seized on top of having the property foreclosed or car repossessed.
Answer Applies to: New Hampshire
Replied: 8/15/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    No. They can not do that without your permission.
    Answer Applies to: California
    Replied: 8/15/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Some banks and especially credit unions have cross collateralization agreements, meaning that they can take money from one account and apply it to another account where you are deficient. You would need to check the paper work you originally signed for your accounts and mortgage. Good luck!
    Answer Applies to: Michigan
    Replied: 8/15/2011
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    Why do you have funds on deposit with a bank you may have a dispute with? Move the funds. Tomorrow.
    Answer Applies to: Colorado
    Replied: 8/15/2011
    The Law Offices of Mark Wm. Hofgard, Esq.
    The Law Offices of Mark Wm. Hofgard, Esq. | Mark Hofgard
    See related questions. The bank cannot execute, or collect, from your other assets until it has a judgment against you. If the foreclosure sale is less than the amount you owe, plus attorneys fees and costs of foreclosure, then the bank will take a deficiency. It may then pursue you for the deficiency, and execute on other assets.
    Answer Applies to: Colorado
    Replied: 8/15/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    A bank cannot take money from your checking and savings account to pay your mortgage, whether you are in foreclosure or not.
    Answer Applies to: California
    Replied: 8/15/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Only if you allowed such a withdrawal at some earlier time.
    Answer Applies to: California
    Replied: 8/15/2011
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    They should not be able to do that until they foreclose and get a judgement.
    Answer Applies to: Florida
    Replied: 8/14/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Many states have laws that allow a creditor to take funds on deposit as a "setoff" against what you owe them when you go into default on any related account.
    Answer Applies to: Indiana
    Replied: 8/14/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Maybe. It depends on if they get a deficiency and properly pursue that, and also on the language of your deposit agreement. They also may go after your paycheck and monies in other banks, depending again on details you left out. See a lawyer before the foreclosure to protect yourself.
    Answer Applies to: Georgia
    Replied: 8/14/2011
    Grasso Law Group
    Grasso Law Group | Charles Grasso, Esq.
    The bank may be able to "offset" the debt by taking from your accounts depending on the circumstances so it is generally a good idea not to have money in a bank to which you owe money. However, if the bank elects to foreclose on the property, then that would be there only recourse.
    Answer Applies to: California
    Replied: 8/14/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    Move your money from any bank to which you owe money. Then you're certain they can't freeze funds.
    Answer Applies to: Virginia
    Replied: 8/14/2011
    Melinda Murphy Dionne, PC
    Melinda Murphy Dionne, PC | Melinda Murphy Dionne
    Banks generally have a lien on any depository accounts to the extent you owe them money. If you are concerned about whether the bank will take your money, you would be wise to move it to a bank to whom you do not owe money.
    Answer Applies to: Alabama
    Replied: 8/13/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Yes, they can. Change banks
    Answer Applies to: California
    Replied: 8/13/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    Yes, your bank can take money from your accounts and apply it to the mortgage. You should open a new account at a bank that does not hold any of your debt.
    Answer Applies to: Colorado
    Replied: 8/13/2011
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
    Yes.
    Answer Applies to: California
    Replied: 6/9/2013
    Ross Smith, Attorney at Law
    Ross Smith, Attorney at Law | Charles Ross Smith III
    The answer to your question lies in the written agreement that you signed with the bank when you opened the bank account and the mortgage account. I know. you don't have a copy of it. So, just to be safe, move your account. I know it's a lot of trouble. But think of the consequences if you guess wrong. Good luck.
    Answer Applies to: Ohio
    Replied: 8/13/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    By law they can. On the practical side, most banks are so large they don't have the resources to do that, and if they take money from someone in foreclosure, it could require them to re-notice the foreclosure. But if you want to be sure, move it.
    Answer Applies to: California
    Replied: 8/13/2011
    The Salas Firm
    The Salas Firm | Ron Salas
    Yes - Generally banks have a clause in their agreements that allows such attachments.
    Answer Applies to: Colorado
    Replied: 8/13/2011
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    If it is a consumer bank account that is subject to regulation Z (which most banks are) no. If the mortgage is with a credit union then they may. However in the future if they take a judgment against you they can garnish the account.
    Answer Applies to: Michigan
    Replied: 8/13/2011
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