Do I have a legal obligation to return money tomy formermortgage company due to a a mistake on their part?.

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Do I have a legal obligation to return money tomy formermortgage company due to a a mistake on their part?.

I am with a new mortgage company because my old one sold my loan. My old mortgage company sent a duplicate payment of my homeowner’s insurance to my insurance company back in 03/10 after failing to pay it on time when it was due in 11/09. I scrambled with my insurer and my mortgage company to make sure the payment went through, and it did in early December. My insurance company sent me a refund check. I cashed the check. Now my old mortgage company wants me to return the money due to their mistake. They are no longer servicing my loan.

Asked on December 21, 2010 under Real Estate Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You absolutely have to return the money. The fact that someone makes a mistake does not entitle you keep their assets. For example, suppose you paid your cable bill twice--that is, you forgot you'd sent a check and sent another one. The cable company could not simply keep your overpayment; they'd have to return it, or at least give you a credit vs. next month's bill. Similarly, if someone makes an overpayment to you, either directly or, as in this case, indirectly (so that they overpaid someone else, who then issued a check to  you), you have to return the overpayment. You cannot keep it. The fact that you are no longer working with that company does not affect this.


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