Grrr! Applying overpayment to principal not a given??

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Grrr! Applying overpayment to principal not a given??

Postby jammadave » Thu Mar 13, 2008 8:40 am

OK, so, I've set up my auto-billpay to send out a fixed amount each month to my HELOC. My monthly minimum is interest-only, but I've never planned to just pay the interest, that's just silly.

Today I decided to update my balances in my big spreadsheet, and noticed that the HELOC principal balance had not changed from last month. I sent them $800 on a $750 minimum. So I called BofA to find out.

Turns out they *don't apply* overpayments to principal, unless the check specifies exactly how much to do so with. This is LUDICROUS. The girl had to put in a *request* to have my overpayment moved over to principal. She told me I could *try* to have my billpay (thru ING) add a memo that says "Please apply any overpayment to principal" to my payment, but she has no idea if that will work. Otherwise I'll have to have the memo line say "Apply $46.62 to principal" or what have you, and that amount will change every month. I have automated my bills so I wouldn't have to deal with this crap!

Note: last time I talked to these people they told me any overage WOULD BE applied to principal.

I'm furious. What can I do? I can't even shop the loan around and get it changed to another lender because of my LTV%. I thought lenders had some kind of legal responsibility to apply overages to principal. =0(

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Postby Cleverbeans » Thu Mar 13, 2008 9:19 am

They'll ding you any way then can, my wife's car loan will not take any payments against the principle unless you've paid three months in advance and even then if you don't specify that the money is for the principle they will just take it as an advanced payment. It's certainly not what I'd call ethical lending but it's very difficult to find a competing product.

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Postby JerichoHill » Thu Mar 13, 2008 1:04 pm

I've heard similiar stories with BOA, which is why I ended my relationship with them
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Postby jammadave » Thu Mar 13, 2008 1:10 pm

Yeah. I've closed one of my accounts with them recently, and might find another place to have a checking account linked to ING as well. But my HELOC and one credit card are with BOA...

I've dropped a tidy little note to the execs about this ludicrous practice and my fingers are crossed. The National Customer Experience honcho sent me a note back that I should hear from one of her people shortly, so I'm cautiously hopeful.

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Postby zach » Thu Mar 13, 2008 2:45 pm


you may THINK you've ended your relationship with BofA. . . :)

I had the same thing happen when I looked into my student loans. $122 payment and $59 of it to interest?????
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Postby Sam » Sun Mar 16, 2008 8:30 am

As of 01/08 we started paying extra on our mortgage with Wachovia. The first month, Wachoiva held the extra payment in the suspense account until I called to inform them that it was extra principal. The customer service rep made a note of it and all extra payments have been credited to principal but I've noticed that Wachovia holds the extra payment for a few days before applying it and now also holds our regular mortgage payment for a couple of days as well.

11/08/07 - Regular mortgage payment posted and applied.
12/10/07 - Regular mortgage payment posted and applied.
01/08/08 - Regular mortgage payment posted and applied.
01/23/08 - Extra payment (first one) posted.
01/25/08 - Extra payment applied (after calling).
02/08/08 - Regular mortgage payment posted.
02/12/08 - Regular mortgage payment applied (first time ever payment was held in suspense account).
02/22/08 - Extra payment posted.
02/26/08 - Extra payment applied.
03/10/08 - Regular mortgage payment posted.
03/12/08 - Regular mortgage payment applied.

I'm considering moving our regular mortgage auto payment (presently on the 8th) earlier in the month.

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Postby marsman57 » Mon Mar 17, 2008 12:59 pm

zach wrote:jerichohill--

you may THINK you've ended your relationship with BofA. . . :)

Yep, one day in about 10 years, he will click to pay something through an online site, not realizing it is linked to the old debit card on his BoA account. Before sundown, his account will be reopened and he will have a $30 late fee =P

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Postby Micah » Mon Mar 31, 2008 8:45 pm

I just noticed today that my car loan is not showing my "accelerated" payment.
My regular payment is 389.90$/mo.
I always write a check for 400$/mo (it's easier to balance and w-r-i-t-e the check) and at times long ago, I paid 500$.

However, my payoff balance is 1$ less than my loan balance... BTW i have maybe 7 payments left.

What gives? Where is my extra money-over-time going? Into some 0% escrow account? Grrr now that I've examined the numbers I'm getting hot under the collar...

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Postby plonkee » Tue Apr 01, 2008 5:05 am

I think it gets knocked off the end payment usually. Ask them.
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threaten to call the BBB

Postby Dani » Tue Apr 01, 2008 6:52 pm

When I had a few banking issues, I called my local bank number and took names (not the 800 number where I was always speaking to someone in India/ no supervisors available). Get to know an employee at your local bank, by name, and politely ask what can be done to resolve the situation so that you aren't forced to call the Better Business Bureau. I find that this usually yields results. I am polite but assertive, and by asking for names and titles people know that you're making notes and they'll be held accountable.

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Postby mallow » Wed Apr 02, 2008 8:36 am

Unless they give you a fake name. I've heard so many stories of customer service reps giving fake names and then promising all kinds of stuff that never gets done.

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