Sorry, no gun blogging lately. News from SHOT Show is pretty much the big thing this week and everybody else is covering it just fine.
So, instead I’ll whine for a bit about my mortgage company.
I recently switched from a local bank to a local credit union for a number of reasons. With that change I moved pretty much all of my major monthly bills over to their auto-pay system since it works much better than my old local bank’s did.
So, I was a bit surprised to see that I had a late fee with my mortgage company this month. I check my bank’s record and sure enough, the amount of the monthly bill (plus some extra) was transfered to them. Log in to the mortgage company’s system and yes indeed, that money got there a full 3 days before it was due.
And they applied all of it, every last dollar, to a payment toward the principal. Nothing toward interest or escrow and 15 days after it was due they dinged me with a late fee for not making my payment.
I am not a happy camper. I’ll probably refinance it with my local credit union just to avoid this nonsense in the future.
rich people rule! (literally.) isn’t it great when banks go out of their way to help the little guy? living in a kleptocracy is something special.
Pretty much why I don’t have auto-payments on anything. Just your one example is enough for me to keep spending a few minutes paying them. I do pay them on-line though. My bank offers free online bill-pay – but I get to control when and how much is paid.
Justin, even if you get a mortgage locally, the bank/credit union will just sell it down the line. They’ll remain as the “servicer” and you’ll write checks to them. But if you have a problem and you go into talk to them, that’s when you’ll find out that they can’t (or won’t) be able to help you.
Actually the servicer is the one who matters when it comes to payment, they are the ones who take the payment and mark it paid.
Call the servicer, if it is different than the mortgage company (the number should have been provided to you with your first bill), and complain to a supervisor. Your mortgage contract, which you got a copy of the day you signed and which they are bound to honor, should explicitly say that your payment is $x including principle, interest, mortgage insurance if appropriate, as well as your escrow (if part of your payment) of taxes and homeowner’s insurance. They cannot apply it all to principle without your permission, typically it requires you signing extra documents to be responsible for your own escrow and then they are only late if not paid when due from the actual provider.
If your contract says that you should have paid the amount you did, by the time you paid it,and it was to include your escrow, then they need to refund any late fee and, if it was reported to the credit bureaus, correct that as well. It’s a contract, hold them to it.
Don’t settle for some phone monkey talking about policy, never take a “no” from someone not authorized to tell you “yes”.
Actually, putting the money towards your principal does more to reduce your long-term debt than anything else would. I can’t say anything else nice about them, but it’s a heck of a lot better than what my bank used to do with fund allocation on the few times we forgot to fill it out in detail on the deposit slip.
Drop an extra $50 or $100 a month on your principal and you’ll be amazed at how fast your mortgage can be paid off.