Mortgage Complaint Question

[Noah930]

Is there anyone (regulatory body) to whom I can complain? Just asking for future reference, if this happens again.

I (on purpose) overpaid my mortgage last month. I try to do that every month, so that the 30-year plan becomes something like a 22-year plan. The "ticket" I return with my monthly payment allows me to itemize how much goes to additional principal/additional escrow/late charge/additional monthly payment/total amount enclosed. Obviously I always fill out those boxes to indicate my overpayment is to go to additional principal. It hasn't been a problem for the past 2.5 years.

Until now. Last month I made a particularly big payment (trying to "catch up" on some overpayments I haven't made in past months). I filled out the ticket like usual--just with a higher value in the "additional principal" line. And wouldn't you know it--those rat b@$tards at Citibank slyly decided to apply my extra payments to the regular payments for the next 2 months. I only caught their underhandedness because I reviewed this month's monthly statement which indicated how much of last month's check was allocated to principal vs. interest, and also indicated that the next payment would be due...in 3 months?!

So guessing what they did, I called Citibank and supposedly cleared it up. (We'll see when I call back on Tuesday.) But I shouldn't have to. I have my suspicions on how shenanigans like this go on by the mortgage lender. If something like this happens again in the future, to which regulatory body do I file a complaint?

On one hand, no harm no foul. But there's no harm because I'm anal retentive and follow up on this stuff. Had I not, then I would have lost out and the bank would have made more money off me. That's not right.

[wdfifteen]

Wish I could help. I think they make these "mistakes" knowing there are a lot of non-anal people out there who wouldn't notice. When they get caught they just correct the "mistake" so there will be no regulation. But who prepays their mortgage payments on purpose? Maybe they'll try to tell you what a great idea it is to prepay interest - which is basically what they have you doing.

[szyzygy]

sometimes your contract specifically states you cannot pay more frequently.

[Zeke]

Originally Posted by szyzygy

sometimes your contract specifically states you cannot pay more frequently.

But you can pay extra principle. He didn't say he made more than one payment per period. This is a wide spread problem. I think some say to send separate checks and note on the principle only payment that that is what is being paid with that check.

[Noah930]

I make one payment per month. So I may have paid more than required, but not more frequently than required. (Don't know if I can/cannot make more than 1 payment per month, but it's a moot point in this situation, at least.)

Other than the very first payment, I've never sent multiple checks simultaneously. The payment ticket has boxes where I'm supposed to indicate how much goes to what. I followed the instructions. It's just the bank that decided not to follow them.

[cuchanonM]

you cannot pay more frequently.

[RANDY P]

They can only bill you for 30 days interest. Anything over and above that HAS to be paid towards principal-

when tehy say "no payment due" that means that they are letting the interest accrue to bring the amount owed back to what it should be.

Keep paying, and record every additional payment monthly.

[john70t]

It sounds like Noah tried to "prepay principle" for the following few months, then skip a few payments, then continue on a normal schedule.

The complication: Are those overpayment applied to the months following, or at the end of the payment schedule(shortening 30 years to 22 years)?

This is where the million page contract, and million page national banking laws come into play.
Altering the payment schedules could also allow the banks to f'k the homeowner with undisclosed additional compounding penalties and interest.
Common problem for millions.

Best to write two,2, mortgage checks.
One check for specified months of principle(depositing possibly being legal acceptance of conditions), and then another check for the tax-deductible interest.

Sum up the total payments by the year. K.I.S.S.

[Shaun @ Tru6]

You may want to call Elizabeth Warren's office, the only person that comes to mind who could definitively answer your question RE: regulatory body.

[cashflyer]

BB&T did this to me recently on my equity line payment: they allocated the additional money I sent toward the next month's payment rather than toward principle.

Now I have to drive to the next town over and pay in person at a branch in order for it to be done correctly.

IMO, this mis-allocation is just another way the banks are hoping to squeeze every possible dime from their customers.

[ossiblue]

The important part of Noah's post is, "The "ticket" I return with my monthly payment allows me to itemize how much goes to additional principal/additional escrow/late charge/additional monthly payment/total amount enclosed. Obviously I always fill out those boxes to indicate my overpayment is to go to additional principal. It hasn't been a problem for the past 2.5 years. "

Previously, the bank clearly accepted his principal reduction plan without complaint so any speculation as to why they applied the extra payment to future monthly payments needs to be placed in that context. The only reason it happened is because of a "mistake" and that's why it was so easily remedied (apparently.) Whether or not the "mistake" was intentional is the cause for concern.

Hard to prove but definitely should be reported, IMO, to protect those who are not as thorough in their record keeping as Noah.

[lendaddy]

How does that saying go? "Never assume malice where simple incompetence will suffice".

Odds are they just screwed up, no need to contact any over reaching regulatory bodies If this were a legitimate "scam" it would require the $8-$10 an hour lackeys processing payments to in on the scam and not blow the whistle...not likely.

[widebody911]

Originally Posted by lendaddy

Odds are they just screwed up, no need to contact any over reaching regulatory bodies

I'm not so sure. It's trivial to add an extra charge or some other minor change to thousands, or hundreds of thousands, of customer's bills. The .00001% that catch it get the "oops, our bad!" excuse and a credit; everyone else gets the shaft.

I had the same principal payment issue when my mortgage was bought by the late WAMU years ago. I caught it instantly, and they didn't try to pull that trick again.

Also: there is an 'accelerated payment plan' that mortgage companies will try to sell you. They'll let you make additional principal payments ahead of schedule, for a small fee.

[sprio]

Citibank is a national bank; their regulator is the Office of the Comptroller of the Currency (OCC). Lending questions for most large institutions, however, are now under the auspices of the Consumer Financial Protection Bureau. Good luck.

When I had questions about how long it was taking for my bank to make a decision on a mortgage, I talked to a regulator at the Fed in Atlanta - she told me that I was technically correct but my complaint wouldn't amount to a hill of beans - she told me that she had the same problem and withdrew her application rather than go through the ***** her bank was putting out. So, if they treat the people who regulate them like crap, how much consideration do you think big banks will give you?

[Shaun @ Tru6]

Originally Posted by lendaddy

How does that saying go? "Never assume malice where simple incompetence will suffice".

Odds are they just screwed up, no need to contact any over reaching regulatory bodies If this were a legitimate "scam" it would require the $8-$10 an hour lackeys processing payments to in on the scam and not blow the whistle...not likely.

Go back to sleep, everything's fine.

[RWebb]

You can waste a lot of your time by contacting them, and asking for supervisor after supervisor - as I recall, your time is pretty valuable, so you may need some other motivation...
- if you do this, then do it ALL in writing; that will be slow and they will try to get you to call them (to waste more of your time and prevent a "paper trail")
- try to find their fax number, then you will have a written receipt showing they received your complaint

You can file a complaint with your state's regulatory body, but I will bet that not much happens.

President Obama attempted to set up a federal regulatory body to take care of such problems, but the opposition party in Congress has defunded it to prevent any effective regulation.

Your only other recourse would be to hire an attorney, but that will not be cost-effective.

I would write them or fax them and if it ever happened again, at least make sure the state has your complaint on record. It may have been mere incompetence, but there are many, many areas where controls are supposed to be in place to catch mistakes.

[RWebb]

BTW - that is a pretty small issue in the universe of mortgage co.s screwing people over -- even before the housing crash (and as per above posts may even comply with your contract)