I have a deep and passionate hatred for my mortgage company.
I’ve talked about it before on some posts and forums, and today I’ve decided to share the entire annoying story. Now in the interest of not getting sued, or getting nasty e-mails/letters, I’m going to use a pseudonym for my mortgage company. I’ll call them… Death Star.
Technically they’re more incompetent than evil, but I wouldn’t be surprised if they spend time at headquarters dreaming up more ways to destroy people….s financial life.
The Prequel – Rouge Mortgage
This story starts a little over four years ago, before the closing of our mortgage. It was actually the third mortgage we’ve had on this house. When we bought it in 2006, we closed on a mortgage at the then-great rate of around 6.75%. Then a few years later we refinanced when rates dropped over 1% to 5.375%. Both original mortgages were 30 years long. It was in 2013 I started to look at refinancing again because rates had dropped significantly.
We originally were going to refinance with our current mortgage company in a 30 year mortgage (I’ll call them Fake Account Inc.) but they dragged their feet and took forever to get our refi going. I’m sure the incentive for them to refinance a loan at over 5% down to a loan at 3.5% was essentially non-existent, so they hoped we would just give up and keep our old mortgage.
So we went to our local bank where we have our checking account and talked with them about doing a refi instead. We noticed that they had a 15 year mortgage at an amazing rate – 2.75% (no points). After running the numbers I determined that the payment on this 15 year would be the same as our current 30 year mortgage. Pay the same and have the house paid off a decade and a half earlier? Yes please!
They actually wanted our business, unlike Fake Account Inc., so the refinance process went smoothly. And about a month or so later we were at the closing, with a rate that was essentially the lowest it would get.
A Long Time Ago, At A Closing Far, Far Away…
The closing went pretty well, although dark clouds were gathering on the horizon. We brought the boys with us (the oldest two of course, since the youngest wasn’t born yet) and brought them plenty of things to do while we signed all the paperwork. The lawyer and the bank representative were both very nice, and the closing went smoothly…or so we thought.
First inkling of the trouble to come was the notice that was part of the closing that the bank would be selling the mortgage as soon as it closed – to Death Star. No problem, we thought. After all, this had happened many times before. We’d refinanced with other companies that sold mortgages right after closing, and our old mortgage had been sold multiple times. We’d never had any trouble with our mortgages, so no big deal, right?
***ominous music***
Foreshadowing the problem we would experience was what was included in closing costs. We had some closing costs but also had to pre-pay our property tax payment. Why? Because we were closing in June, and the property tax payment was due in July, we had to pay it upfront. Not a problem though – we would get back our escrow money from the other mortgage company. That should go smoothly too, right?
***ominous music gets louder***
The first month or so, there were no issues. We got letters about the sale of the mortgage, and I got instructions on how to use the website of the Death Star company. It was on that website that I discovered the issue.
They issued a tax payment to my town and took my escrow account thousands of dollars into the red!
This wasn’t the payment I paid at closing. Oh no, that had been mailed from the lawyers directly to the town. Instead this was a second payment that should never have been made. And guess what? They were planning to recalculate my monthly escrow payment in just one month! How great for them. They’d get hundreds of extra dollars each month from us.
No worries though, I was sure this could be straightened out in the next month before the escrow was recalculated. Remember how we never had an issue with a mortgage company before? And this was such a simple mistake. I could prove from the closing paperwork, the lawyer, and the town records that this was a duplicate payment. Easy fix! They could just reverse the payment, fix the escrow account, and it would all be fine – right?
Thus Started Our Epic Journey…
I called the Death Star to get this straightened out and began my epic quest.
Every time I called I got a different answer on what it would take to get this simple problem fixed.
- “It should only take a few days to get this fixed”
- “Oh it might take six months to get the payment back from the town”
- “Sure, we can have a supervisor call you back”. Of course, those call requests went into a black hole in deep space
- “I’ve escalated this to the group that handles this kind of request”.
- TWO WEEKS after I had first called them, they still hadn’t even contacted the town to verify the duplicate payment.
- “It might take seven to ten days to even start the process”
- “They should be contacting the town any day now”
I even had my husband and the lawyer contact them on a conference line to help straighten out the problem. The lawyer was astounded at how difficult the company was being – and at their level of incompetence. This wasn’t a small amount of money – half a years property taxes in Connecticut is thousands of dollars. They were being so callous about this missing money that I just couldn’t believe it. This went on for weeks with nothing – no contact to the town, no letters, no callbacks. Just nothing. And every day that went by, they were getting closer and closer to recalculating that escrow payment – which would have cost me hundreds of dollars extra a month.
Since I wasn’t having any luck getting the mortgage company to even bother to contact the town to verify the duplicate payment, I worked with the town and the lawyer on an alternate plan:
- My husband went to the town property tax office and got proof of the duplicate payment
- He then went to the lawyers office where they filled out paperwork to get the money back
- Less than a week later, the duplicate payment was sent back to the lawyer, and back to me
- I deposited that money in a separate savings account, which I nicknamed “I Hate Death Star”
- I planned to use that account to pay for the extra escrow money on the mortgage
- I then filed a complaint with the Consumer Financial Protection Bureau, or CFPB. I also had contacted my states Department Of Banking, but I ended up getting the money back before I needed their help.
The Death Star company had earned my distrust and hatred through this month long process. I’ve never been treated so poorly – they acted like my business was worthless to them. They didn’t care about helping to fix their mistake. Their representatives couldn’t keep their stories straight, and seemed to have no way to actually help. And to top it off, their response to my CFPB complaint was rediculous – essentially, “you got your money back from your lawyer, so there’s no more problem!”
NO, people. The problem was your incompetence, ruining the experience of a new customer, and causing that customer to talk to (now many) others about that experience.
A (Somewhat) Happy Ending
Fortunately I haven’t had other issues since this time. The way this story ended is that they didn’t recalculate my escrow that year – likely due to my complaint to CFPB. They did recalculate it next year, so I had the choice – do I use the money in my special savings account to just pay of the shortage?
No, I decided. That would be too easy for them. I decided to use the money in the account to slowly pay the overage every month, so they wouldn’t get the money for 12 full months.
I also decided that I would get paper statements from them from that point forward. Electronic statements cost them less – but why am I interested in costing them less money? The extra quarter they have to pay each month to mail me my statement is my small revenge.
They’ve also been begging – literally BEGGING – me to refinance again and take equity out of my house. By begging I mean that they e-mail me almost every day, trying to scare me that rates are rising and I better learn my “Equity Quotient” right now to get the extra equity out of my house before rates go up! I’ve gotten multiple letters from them in the mail per day – even certified mail! – telling me all about why I should refi.
HA HA HA HA HA HA… NO.
I Want To Hear From You!
Do you have an epic tale of doing battle with a company who seems to want to destroy you at all cost (or at least, really annoy you)? Have you had issues with your mortgage company? Let me know in the comments.
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Our problems aren’t nearly that bad. Naturally our bank tried to get us into a mortgage $100k more than we could afford. (This was 2012)
Once we did buy a house, at what we actually could afford, they kept doing the math wrong for how much we needed to escrow for insurance and taxes.
They ended up missing one of the payments and we got a nasty-gram from the government. I called the bank and told them. After a few phone calls and a couple of days they finally sent the check and promised to cover the fee.
Needless to say I kept checking the county website to make sure it got paid.
After the gov got their money I closed the escrow and started doing it all myself. It has gone much smoother. Plus we actually get better interest rate in the savings account I set it up in.
I wish I could just close the escrow-I’ve asked them to do that before but got no response. I’d much rather have control of that money than give it to them! Luckily I haven’t had other problems with them paying taxes, although they do it Ibarra get dates. That means some years they pay taxes three times, and other years only once. It messes up my taxes, which is annoying.
Thanks for the expose on what to look out for on mortgages. I have 2 and have never had any issues, but this article inspired me to really watch the fine print and to know where my tax payments are going. Especially on my new investment property mortgage as we closed in may and taxes were due in june. I’ll keep an eye on that one. Thanks.
Hopefully everything will go smoothly for you!
I couldn’t help but laugh at the repeated refinance emails. I’ve in general had good luck and been left alone with one exception. For a while there every two days I’d get a letter or email about getting mortgage life insurance. The premiums are double my term life that pays out more. I guess they think I’m gullible given how many times they told me what would happen to my spouse if I died without their particular brand of insurance.
With my old mortgages that’s all I would get too-I think my company must (a) think I’m stupid, (b) think I’m desperate or (c) think I’m bad at math. No way they can offer me a better deal than the one I already have.
I think I’ve had said Death Star mortgage company before (my mortgage also sold to them). Yes, they are awful and ignore most requests from their customers it seems.
Although my current Big Bank Mortgage isn’t much better or more honest it turns out. I’d love to knock out my mortgage and not have to deal with any of these issues anymore!
Get a phone recorder app and record every interaction you ever have with Death Star in the future. CT is a two party consent state, so do a little preamble before you get started: “Just to let you know, I may be recording this call.” It’ll come in handy for future complaints / small claims suits, and it might scare rookie customer service reps into not being lazy/giving BS answers, too.
Why do you pay your property taxes through escrow? Are you required to do so? When we had a mortgage, we just sent in a check for the property taxes each year. I don’t know why I would want a third party to keep my money interest free for a year, and then hope that they sent the check to the right place and on time.
Yes, I’m required to. Some companies don’t let you pay yourself.
Wow! That’s crazy! I can say that we refinanced with Quicken Loans because my previous mortgage wouldn’t refinance me and it was the easiest process and has been an awesome experience. We even refinanced a second time with them as rates have continued to drop and we were able to snag the 15 yr status as well within our payment range! It’s awesome seeing the principal going down that much faster!
I know, I love the 15 year for the same reason! I’ve heard good things about Quicken Loans-even have a former coworker who works there.
Well the best part was that we went from having 26 years to having 20 the first time. Then after 3 years we went down to a 15 year! They make it work with any time limit so you don’t get stuck in the 15 or 30! Really has helped us save and take almost 8 years off the mortgage so far!
Oh wow the patience you must have! Paper statements are a good call. For my student loans I didn’t trust my servicers and I took screenshots of all payments and requested paper trails of everything. 22 year old Lily is just as suspicious as 26 year old Lily.
Good idea! Great way to cover yourself. Can’t trust those big servicers to do anything right.