livingdeb: (Default)
livingdeb ([personal profile] livingdeb) wrote2010-09-06 10:30 am
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Mortgage Payoff Quote

Check out this amazing sentence from a mortgage payoff statement, which is used to tell a homeowner exactly how much will be required to pay off a mortgage at a certain time:

"Except where prohibited, [mortgage company] reserves the right to adjust the above figures ..."

So, even though you've asked the actual experts an exact figure so you don't get in trouble, they are allowed to give you a random crappy figure to get you in trouble anyway.

"and refuse any funds which are insufficient to pay the Total Amount Secured by the Mortgage ..."

So, even though you give them a huge pile of money, they can refuse all of it and then charge you more interest and even late fees.

"for any reason including but not limited to error in calculation of the Total Amount Secured by the Mortgage, previously dishonored check or money order, stop payment of checks or ACH payments or additional disbursements made by [mortgage company] between the date of this payoff statement and the receipt of funds."

So not only can they make up any figure they want, if you've ever bounced a check, they reject this one without even checking if it's going to bounce. Or they can suddenly decide to give you money. Or they they can make up any other reason they like (such as my dog was hungry when I got your payment).

Here's another good one: "Payoff funds should be remitted via wire transfer .... If you are not remitting funds via wire transfer, payoff funds must be in the form of a CASHIER'S CHECK or OFFICIAL BANK CHECK ..."

I looked it up, and an "official bank check" is not the same thing as a normal check. So they want you to use some expensive method.

And here's another good one: "You understand and agree that if [mortgage company] received and processed a payoff and subsequently is requested to return such payoff funds due to loan rescission or for any other reason, unless prohibited by law, [mortgage company] will charge a reload fee of $1,000.00."

That's quite a bounced check fee, eh?

I'm not yet ready to pay off my mortgage, but when I am, I am not going to ask for another one of these ridiculous things. I am going to send the amount I will owe minus one payment as an early principal payment by check. Then when everything has gone through, I will ask customer service what's next.

(Anonymous) 2010-09-07 02:11 pm (UTC)(link)
FYI, my contact in the business says that your plan to get around this won't work - you do have to request a payoff amount because there are fees to be paid and interest. Payoff amounts are good through a certain date to reflect these amounts.

Even if you find the process silly/annoying, it seems that following it makes for smoother sailing than not.

-sally

[identity profile] livingdeb.livejournal.com 2010-09-08 12:01 am (UTC)(link)
Well, then what happens when you pay things off the normal way, by just making minimum payments the whole time?

I can calculate the interest myself. There was a $20 filing fee which they can easily take from my other money or they can make me do the filing myself.

Their quote did not take into account the automated payment scheduled for between when I made the request and the date I chose, so their number was pretty squirrelly anyway.