It wouldnt be the smartest move, but theres really nothing to prevent it from happening. The money does not sit in an escrow account managed by a third party. It sits in the borrowers bank account, where its totally accessible. So the lender has no assurance the borrower will keep the money to serve as a safety net (which is the intended purposes of cash reserves). More Prevalent in Wake of Housing Crash. Cash reserves are nothing new.
Go to your bank where the account you pay the lenders with every month is based and have a meeting with someone in the bank. You have to say you are suffering hardship and use that exact word.
Explain you cant pay your debts and need to stop the direct debits going out of your account. Say you have tried to talk to the lenders, but they wont listen, so you need your banks help. This will stop all direct debits going out of the bank. There are some sample template letters on this site you can also use to send off to them as well here.
Copyright 2018 CashOne. All Rights Reserved. Cash Reserves on Mortgage Loans Can Trip Up Borrowers. By Brandon Cornett | May 26, 2011 | © HBI, all rights reserved. Some mortgage lenders are requiring more cash reserves today than they did in the past. Its part of the less-risk mentality adopted in the wake of the housing crash. For borrowers, it means one more hoop to jump through when qualifying for a mortgage. And for a rising number of home buyers, it can be a painful lesson in mortgage rejection.
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