Mortgage Co disbursed repymnt plan to other areas than to our principal and interest-

We fell behind on our mortgage payments; therefore, they set up a repayment plan with us. The last payment was in November of 2007; after the last payment, I received a statement from the mortgage company that we were 4 months behind on our payments and had to pay $1699 a month to get caught up. I looked at our account and they had disbursed all the "repayment" monies to escrow, taxes, etc.; but they did not apply towards the interest or principal. I was livid! I tried to call several times to straighten this out and always got people who barely could speak English, I even told them I wanted someone in America, not India to talk to. I finally spoke to someone who took all my financials down and told me that someone from the work out department would be calling me for another repayment plan after they submitted my info to their investors--it is now August and I have heard from NO ONE and our loan also went up from 6% to over 9% and now we are showing $11,000(something) behind on our loan, they are wanting over $3,000 per month to get caught up, no one has called, they just sent a statement. I bought this home when I was 22, I am now 39, and we had to refinance 2 yrs ago because I was not working and my aunt, grandmother and mom were all ill and did pass away very close together. We owe $76,000 on it and this house is old and not in good shape, BUT IT’S MINE-at least for now--I am at a loss; I am very scared that I will lose our home. We do not have enough money to hire a lawyer but we make too much (on paper) to get free legal help. Does anyone know a lawyer in Houston who does not charge a leg and an arm? Or does anyone have suggestions how to deal with our mortgage company? Thank you for any suggestions!

I'm sure you have an agreement that specifies whether you or they are responsible for paying the taxes... in fact, you mention escrow, so realistically after you defaulted, they can do exactly as they have done... but READ YOUR MORTGAGE... OR TAKE IT TO A LAWYER... TO DETERMINE WHAT YOUR RIGHTS ARE ON THE INCREASE IN INTEREST.

If you now have the ability to pay a mortgage, I would recommend that you take proof of your job to a NEW mortgage company, explain the problem and see if they will give you a fixed mortgage to pay off the mortgage with this company. Go local... credit union or bank. Do not do internet or commercial lenders that do business everywhere from a large eastern city...

I'd suggest that if you have the wherewithall to pay that you begin making a personal relationship with your banker. Verify whether they sell their loans.
Go quickly, this is going to take a while. Keep up as much as you can pay on the current mortgage as they have outlined. Good luck... I think you will need it because of the timing.