Equal Home Finance Bureau ALERTS!

Refinancing Run-Around

Dear Equal Home Finance,

When we refinanced our mortgage, our interest rate was 15.5% and it had a prepayment penalty of 3% of the loan amount. According to my findings, this is was in an effort to discourage us from refinancing. Also, I believe in the state of Illinois, it is against the law to charge a prepayment penalty if your mortgage amount is over $100,000. Upon requesting a payoff from the mortgage company, they charged $20 for faxing the payoff request, $10 for figuring the payoff, charged us about $300 for an escrow account we didn't even have!

According to my findings, the mortgage company had to get our permission to charge the $10 and $20 respectively which we never agreed to. Also, in the midst of refinancing, the mortgage got sold from one company to another. The new company never acknowledged our mortgage payment to the old mortgage company and therefore charged us an additional mortgage payment on our payoff.

All attempts to contact the mortgage company have been extremely difficult. No one returns phone calls. I have resorted to contacting them via Federal Express and getting proof of signature to just to prove that I've made contact with them.

Is there anything I can do? The Better Business Bureau was not helpful and offered no explanation for this - mostly because the details of it were over their head. They didn't want to deal with it.

Thanks for your help.
V.S. in Illinois

Dear V.S.,

So sorry to hear about this problem. First, we'll give you some practical advice that you can try with the mortgage companies, and then some sites where you can find more information.

First, if you still believe there is some recourse, you may want to attempt to contact each of the mortgage companies gain. The first one apparently received your mortgage payment after the sale, and may have a refund for you if you can track it down. One thing we can recommend in dealing with troublesome mortgage companies is to find someone with in the company who can identify with you. In other words, if you treat everyone in the company as if it were one big bad company, you may never find anyone who will be willing to help you. Try to find someone internally at with whom you can plead your case. Try to stay on the phone with them, on hold, as opposed to calling you back. We've had consumers tell us that after diligently discussing problems with the head of customer service, they were able to fix things. Remember to keep your eye on the prize so to speak. You're calling to get your money back, not to punish someone on the phone for the pain the organization has caused you. It's not easy to say, but many consumers have found this their only recourse because they didn't want to spend the money on attorneys and court cases. The State of Illinois says it best in the following excerpt:

"The best way to resolve a dispute with your institution is to meet with the institution's officials and explain your concern. In most cases there has been a misunderstanding between the customer and the institution which can be resolved with direct dialog between the parties. If you are unable to resolve the problem with the person you are dealing with, ask to see a customer service manager or the officer in charge of the area in which you are having problems. Financial institutions want to be good corporate citizens and will in most cases make every effort to satisfy a customer's concerns. However, financial institutions are in the business to make a profit for their stockholders as well as serve their community and must follow the policies and procedures established by their board of directors as well as following state and federal law."

"When you meet with the officials at the bank, have all of your facts and documents with you. Emotional arguments are not as persuasive as facts. If you believe the institution has made an error, bring in your documentation and show them where they have made a mistake."

On the other hand, if you really feel this hasn't worked, you can contact the State of Illinois and it's Office of Banks and Real Estate. At the following web site, you will find a complaint form to complete and fax or mail to the appropriate people in the Office of Banks and Real Estate regarding all mortgage banking problems.

http://www.obre.state.il.us/CONSUMER/FORMS/cnmrtfrm.htm

Again, let us say one more time, the best, fastest, easiest way to resolve this issue is if you can find someone within each of the mortgage companies who will work with you. As soon as Government bodies and attorneys become involved, there will be lots and lots more paperwork and more time.

Please tell us how things get resolved, and if this information was helpful.

Best regards,
The Equal Home Finance Bureau

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