I work for a mtg company so I will try to explain some things. If you were not originally escrowed for tax and/or ins, your pymts would have just been P&I. If you had no Insurance or proof that you paid your Ins, you could be Lender Placed for the Ins. LP’ed Ins is very expensive. If it was tax that was due, the Mtg. Co. would pay that rather than letting it be delinquent and possibly have the home sold at a Tax Sale. If you could not pay those and requested the Mtg Co to pay that, then an escrow acct. would have been set up and then you would owe both P& I and T&I (escrow).
There are steps that should have been done by the Mtg Co before it got to this place. You should have been notified by mail that you needed to provide proof that you had Ins and that it had been paid or you should have gotten notices from your Tax office saying that the taxes were delinquent. You did not specify whether it was tax and/or ins that you were escrowed for so I am giving both scenarios.
You should have gotten an Escrow Analysis after they added T&I showing a bunch of figures and the new pymt amount with the T&I. Honestly, I am very surprised that they continued to take just the P&I part of the pymt. The Co. that I work for, would have mailed your cks back as short pymts with a letter explaining that. Did they ever send you any correspondence about the pymts that what you were sending being less than what was owed?
I assume that you have spoken with Default Mgt or Loss Mitigation about the Foreclosure. It seems very odd that they cannot work something out to get the escrow funds they paid out for you. Since your escrow acct has a deficiency and shortage, maybe they could spread that over 24-36 months. If the Mtg Co did not send you correspondence about your pymts being short along with asking for the whole pymts, then they were negligent, IMHO.
If you received correspondence and just kept paying the P&I only, then you need to get them the money that the Mtg Co paid out for your T&I. From the Mtg Co perspective, it was their money that was paid out for T&I and they do need to get paid back for that. I have not heard of Foreclosing over T&I and I would question that just because they did continue taking just the P&I pymts. Of course, I do not know all the details so I can only speculate on what you may or may not have gotten in correspondence, etc.
Your offer of $4000.00 right now sounds very reasonable. They should be willing to take that now and then spread the rest over 12 months. In the current housing market, it seems like they would much rather do that than a foreclosure. Foreclosures are very expensive for Mtg Companies to do.If this is set for a Foreclosure sale the second week of Feb, you should have been getting many letters during that time requesting money.
The only thing that I can suggest it that you keep calling them. Call your current Company Monday but at this point, they will probably not be able to do anything. I don’t know what the Foreclosure laws are in GA so you would have to speak to a Real Estate Atty for that. I wish you the best.