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A couple years ago, my wife called Wells Fargo, and had them setup Bi-Weekly payments. My understanding was that this helped reduce your over all cost in 2 ways.

1) This would lead to extra payments being made in the months when you paid 3 times.

2) By paying 2 times in the month, you pay the loan off slightly quicker, thus reducing your overall cost.

Its the second part that I seem to be wrong about.

Lets take this month as an example. WF took out 2 payments, one on the 5th, and one on the 19th. However, these payments will not post until Nov. 2nd, appearing as a single payment on our statement. I called them today, and asked, "Where is my money from October 5th until its posted on November 2nd". Their rep told me that it sits in a 'holding account' until then. I was stunned. I pointed out that WF is drawing interest on my money for nearly a month instead of posting it to my account. The rep denied this, saying (spanglibonics gibberish....), "Naw, thats not was Well Fargo is all about, we just trying to save you money. Sir, no banks post twice a month, they all only post payments once a month."

Questions:

A) Is it true that NO mortgage companys post twice a month

B) Where the *feck* is the interest income going that is being drawn on MY MONEY when its sitting in the 'holding account'. The rep denied that the money was accruing interest in the 'holding account'. OH REALLY? Thats funny, I've never heard of a bank that would let millions of dollars sit in holding accounts and not attempt to make money off it, either for their benefit or for the customer.