Banks - same game, new rules

Had a recent situation I wanted to share and warn you about:  A family member recently obtained a mortgage to purchase a home.  The bank offered her the split the payment option so she pays her mortgage in two segments each month.  When this option was first developed it became popular because by doing it this way 7 years will eventually be cut from the time frame of the mortgage due to the positive effect it has on bringing the interest down so much quicker.

After one year of paying this way she inquired at the bank regarding her payments and was told after much questioning that "NO" the early part of the payment was not being applied directly to the mortgage it was being HELD until the second half was received and then a single payment was made to her loan.  Needless to say she was irate!  The bank simply maintained her funds to the benefit of THEIR use but did not apply it to the loan amount for HER benefit.  It was all a smokescreen from which no benefit was occurring.

This is a significant change to the way the bank handles payments than in the past AND the sales pitch is almost identical so one is led to believe that it is the same program.  If you have selected this option with your bank, ASK.  You may just be going down another primrose path expecting that your mortgage is being reduced when in fact it may not be.

One cannot help but wonder how many millions Wells Fargo and other major banks are holding and using in this program under the innocent wrong expectations of their customers and how many rude awakenings there will be in the future.

This cartoon seems to sum it up best:

In other news:

A mother took her 4 year old to the doctor for some tests. After the appointment a $20 bill was received and paid.  A month later another bill arrived.  The mother called and told the billing department that she had mailed the payment .  They looked at the account and said they had indeed received the payment and it was applied to the account under the mothers name not the daughters so one account had a credit balance and the other showed a past due.  They assured her they would fix it. 

Soon a second bill came and the mother ignored it figuring that the timing was off and it would be corrected by the next billing cycle.  The third month past and she called again.  Finally the forth month arrived with a bill saying the 4 year old child had been turned into COLLECTIONS for lack of payment.

The mother then had a chance to work on her new patience (not patients) development skills and called the office again and explaining the situation while trying to keep her irate attitude in check.

From the archives:

 Wells Fargo passes Counterfeit $100