Bank messing with my mortgage

[thatguy]

They sold the mortgage or they changed who processes it. It was the same bank as my checking. I could log in and pay the mortgage and some other things I do at bill pay time. The mortgage payment would occur instantly.
Now I have to log in to a different website and the payment takes days to process.
It's a ARM. The new processor, or whatever, screwed up the rate and made a rediculously high rate adjustment. The fixed that, but, their information page is incorrect. They have the wrong rate adjust date, It's Feb 1, they think July. They have the correct offset & index The next rate should have been set 45 days prior to the change date. They can look at years of payment history and see that all rate adjust have been on Feb 1. They also show the rate ceiling as 12% and it's supposed to be 11%.
So if nothing is fixed, my low rate will last until July, than it is likely the index will go up and the rate will be higher.

It appears the July rate adj date is an anniversary of the loan origination date.

Thing is, there was a mortgage modification done in 2003 that changed the terms and change date, and I have a copy of the document.
I have not shared it with the bank because one of the terms on the document, is the rate can not be less than 3%. Reality is the rate has actually been adjusted below 3% some years, and is 2.625 right now. Based on what I know it should adjust to 2.75% Feb 1.
So I can prove what I say the terms are supposed to be but it would reveal that the rate has been adjusted below the specified minimum for several years

 

[COcheesehead]

1. Set the mortgage up on BillPay to eliminate the monthly login. You can schedule it and forget it.
2. Consider refinancing if your ARM is going to reset. Rates are only going to get higher.

 

[jazz4cash]

Agree with 1 and 2 above. Seems like a good time to lock in a fixed rate.

 

[Another Reader]

Bad servicers cause bad headaches. They won't disappear with time. I would refinance to a fixed rate with a good broker or bank with competitive rates.

 

[tulak]

There’s never a guarantee, unless you go with a bank or credit union that keeps their mortgages, that your mortgage won’t be sold.

But I agree with refinancing if it makes sense. I refinanced to a 30 year fixed mortgage from an ARM last year when rates were low. I got the same rate as the ARM and now it’s fixed for 30 years.

 

[thatguy]

We're 2/3rds of the way through the 30 year loan. We're getting closer to time to just pay it off.

 

[RobbieB]

Loans are sold often.

You got a variable? Good time to fix it.

 

[freedomatlast]

If you're that close to paying it off, one other option is to see if you can get a home equity line of credit at a decent rate with no origination fees. Then pay off the ARM with the line of credit, and pay down the line of credit as you wish.

 

[thatguy]

Called the bank. It looks like a home equity loan could work. Rate was better for 15 years. 1/4% off for direct auto payment within same bank. Cost $300 to $700. Still need to let an appraisor in. I gotta organize some things and make some unfinished projects look better before letting an appraisor inside, which is why I didn't refi in the first place. I'm a messy person.

 

[jazz4cash]

We're 2/3rds of the way through the 30 year loan. We're getting closer to time to just pay it off.

Not sure why that matters.

 

[jazz4cash]

Called the bank. It looks like a home equity loan could work. Rate was better for 15 years. 1/4% off for direct auto payment within same bank. Cost $300 to $700. Still need to let an appraisor in. I gotta organize some things and make some unfinished projects look better before letting an appraisor inside, which is why I didn't refi in the first place. I'm a messy person.

Something sounds off. Home equity loans are generally no cost up front but carry higher interest rates compared to a regular refi since they are typically in 2nd position.

 

[thatguy]

We'll it was a short phone call with the loan officer so I don't have it documented. It was the same bank that has the mortgage and my checking and savings. The loan would pay off the mortgage. I have a high credit score.

 

[Koolau]

Dealing with a "sold" mortgage is a pain. Just setting it up is an exercise in frustration. The "foreign" paper holder asked for one piece of documentation after another. It became so cumbersome that I backed out. My CU had set it up (and potentially sold it - long story.) The CU then agreed to take the paper themselves at the same rates. YMMV

 

[Walt34]

And yet another argument in favor of just paying the mortgage off.

 

[euro]

We'll it was a short phone call with the loan officer so I don't have it documented. It was the same bank that has the mortgage and my checking and savings. The loan would pay off the mortgage. I have a high credit score.

Be very careful when using a HELOC to pay off a mortgage. HELOCs can (and sometimes will) be called at any time. A mortgage cannot. If you go that way, be sure you have the cash to pay it off when the going gets tough.
Some people will say: "well HELOCs don't normally get called". Not true: during the GFC in 2008, tons of HELOCS were called. Buyer beware

 

[euro]

And yet another argument in favor of just paying the mortgage off.

I agree, but this is definitely an interesting time with high inflation and low interest rates. High inflation is good if you have a mortgage, especially if the mortgage is dirt cheap

 

[thatguy]

Why does a bank call a loan?
It's gonna be a fixed rate home equity loan. Not a HELOC. I didn't get the emailed application from the bank and it was too late to call them back, but I should be able to apply for the loan Monday.

With autopay it's gonna be 2.74% for 15y. It's only like 25% of the home value. They can do a drive by appraisal. The fees are much less than a refi.

 

[pjigar]

Why does a bank call a loan?

Bank can call loan for a number of reasons.

https://agrilifeextension.tamu.edu/...an-a-lender-call-my-loan-even-if-its-current/

 

[euro]

Why does a bank call a loan?
It's gonna be a fixed rate home equity loan. Not a HELOC. I didn't get the emailed application from the bank and it was too late to call them back, but I should be able to apply for the loan Monday.

With autopay it's gonna be 2.74% for 15y. It's only like 25% of the home value. They can do a drive by appraisal. The fees are much less than a refi.

Sorry, for some reason we thought you were talking about a HELOC. If it is a regular 30y fixed, then you are right, those normally cannot be called, except for the special conditions detailed in the link of the previous post

 

[DJRR]

Unused Heloc line of credit can be cancelled. I have had lots of heloc and none can accelerate an outstanding balance. PNC offers a home equity fixed loan for about 3.25% with no fee that I used several times. It is called rapid refinance or something like that.

 

[jojo777]

You should refinance to a Fixed 10 year mortgage. That will keep you in the correct pay off date range and the rate will be better for 10 or 15 than for 30. You can do mortgages now for however many years you like with most national lenders. Home equity rate will be higher.

 

[thatguy]

You should refinance to a Fixed 10 year mortgage. That will keep you in the correct pay off date range and the rate will be better for 10 or 15 than for 30. You can do mortgages now for however many years you like with most national lenders. Home equity rate will be higher.

Drive by appraisal. 2.74% fixed rate 15y. If I get what they offered, it works for me.

 

[ERD50]

Dealing with a "sold" mortgage is a pain. Just setting it up is an exercise in frustration. The "foreign" paper holder asked for one piece of documentation after another. It became so cumbersome that I backed out. My CU had set it up (and potentially sold it - long story.) The CU then agreed to take the paper themselves at the same rates. YMMV

And yet another argument in favor of just paying the mortgage off.

I dunno. I've had mortgages sold and never had a problem. I don't escrow through them, so I think the only possible change would just be where to direct the auto-payment.

Time for me to update my spreadsheet, but mortgage arbitrage has worked well for me, certainly worth any 'pain' I might have endured.

But to each their own.

-ERD50

 

[CRLLS]

I dunno. I've had mortgages sold and never had a problem. I don't escrow through them, so I think the only possible change would just be where to direct the auto-payment.

Time for me to update my spreadsheet, but mortgage arbitrage has worked well for me, certainly worth any 'pain' I might have endured.

But to each their own.

-ERD50

Every mortgage is different. With one mortgage, we were contacted by a different lender. They mailed us the notification that they had bought our mortage and told us where to send future payments. I found it odd our lender had not notified us, so we contacted our lender. They said that they did sell a bunch of mortgages to the other lender, but ours was not one of them. WTF? If so, then how did they get our data? We did get it worked out.

Not related but interesting off topic, we had another lender send us notification that our monthly payment would need to be tripled! Another WTF moment! It turned out that they accidentally paid somebody else's taxes from our account in addition to our taxes. That put our escrow below zero. Their computer said I had to make it up over a 6(?) month period and adjust for the combination of both properties' future taxes. We got that corrected but refinanced ASAP.

Mortgages, in general, are a pain IMO.

 

[jazz4cash]

I haven’t had an escrow account for 20 yrs. it’s one less way for the lender to screw up. I like it that way and mortgage lenders seem to not care which could be due to being a “seasoned” homeowner. They don’t really bother to verify homeowner’s instance is on order. I recall about 15 yrs ago getting a quote to refi and the loan officer scoffed when I requested no escrow. He said they’d charge me a fee but they didn’t and I went with a different lender anyway.