Extra mortgage payment

[disneysteve]

What difference does it make that they are a collection agency? Just because they are a collection agency, it does not allow them to draft your account on a whim.

I can somewhat understand the reluctance here. Collection agents are notorious for sucking money out of people's accounts once they have the access. That's why financial advisors always say not to settle with a collection agency by giving them electronic access to your account. Rather pay with a money order or cashiers check.

In this case, however, the mortgage division and the collection agency division really should be separate entities so I can't imagine this would be a problem.

[tripods68]

I can somewhat understand the reluctance here. Collection agents are notorious for sucking money out of people's accounts once they have the access. That's why financial advisors always say not to settle with a collection agency by giving them electronic access to your account. Rather pay with a money order or cashiers check.

In this case, however, the mortgage division and the collection agency division really should be separate entities so I can't imagine this would be a problem.

If you have Freedom Mortgage stay away.

Last time i've dealt with a collection agency was in my early 20's over a cancelled gym membership fee that I didn't know about. Simply put a $50 fee jump to $250 once collection agency got a hold of it. My point, it's never advisable to give your bank information to any collection agency even if its your mortgage service lender. I adhere to it always "be safe than sorry".

We just refinance 2 months ago so the idea of another refinance process is not an option.

Anyway, I just check my mortgage balance online. It posted with the extra principal correctly. I was a bit surprised since they said it usually takes 3-4 days to appear payment online. That turn out to be a complete lie. I'm learning now their customer service aren't too sharp or the person i spoke at that time didn't know what he was talking about. Either way, i'm gonna stick to the plan for next month until I can feel confident they can accept 1000 or 2000 extra principal payment without issues.

[tripods68]

What difference does it make that they are a collection agency? Just because they are a collection agency, it does not allow them to draft your account on a whim. If you are current and not in default they cannot do anything like that.

I don't care who you are, mortgage lender or not its never a good idea to give any of your bank information especially a collection agency. I worked for one of biggest bank in the country so I know from experience its never a good idea.

[bjl584]

I pay online.

I have the option of designating where the money goes (extra principal)

I pay a little extra toward principal just so the payment is a nice round number.

[greenskeeper]

Our loan was sold to this lender as the service provider. I don't think we have no recourse since it was disclosed to us during closing. The only way to get rid of this lender is we refinance again, or our gets resold to another lender.

I think there should be a law that benefits the consumer when a loan is sold. Say a percentage (very small) of the balance as a transfer credit or something.

On both of my houses we had a great lender for a few years and then it was sold to some half-assed mortgage company.

[dczech09]

I don't care who you are, mortgage lender or not its never a good idea to give any of your bank information especially a collection agency. I worked for one of biggest bank in the country so I know from experience its never a good idea.

People exchange bank information all the time. It's called a check.

My whole point was collection agency or not, they will not draw money from you unless you owe them the money. If you are behind or in default, they may draw money out of your account and you will have no recourse since you owe them the money. But if you are not behind, you have nothing to worry about.

Banks do not want to draw extra money from you; they want you to stay on your payment schedule because that maximizes their profit. Even if they operate as a collection agency, it is not their motive to just screw you over by drawing money from you. And if they do, we have things called consumer protection laws in place.

You do what you want to do. In the circumstances that a collection agency is actively trying to collect from you, then absolutely I would agree with NEVER giving them bank information or allowing them electronic access. But in this situation when it is your mortgage lender, you have protection. The fact that they also operate as a collection agency should not matter unless of course they are actively trying to collect from you.

[tripods68]

People exchange bank information all the time. It's called a check.

My whole point was collection agency or not, they will not draw money from you unless you owe them the money. If you are behind or in default, they may draw money out of your account and you will have no recourse since you owe them the money. But if you are not behind, you have nothing to worry about.

People can't be so trusting about their lender/collection agency will not screw with your account. Why take that chance when you avoid just avoid it. Its best to stay away.

[Jovanny]

If you are paying them through checks, you are probably giving them your bank information.

[tripods68]

If you are paying them through checks, you are probably giving them your bank information.

Giving them a check to pay your bill is totally different than authorizing them to draw money from you checking account - They are mutually exclusive.

If you authorized a lender, who is to say no one can messed up and draw more than they are allowed from your account. There is no assurance from them this will not occur. Even on rare occasion it does occur, my time is worth more than to deal with all the hassle to get your money back.

Most people would advocate for trusting their lender, not me.

[scfr]

The only way to get rid of this lender is we refinance again, or our gets resold to another lender.

There's another way to get rid of that lender, which is get that mortgage paid off, and you are already working on that. Keep it up tripods68!

I applaud you for sticking to your guns about not sharing your bank information with a collection agency, even if lots of other people say "so what?"

There is nothing wrong with a "better safe than sorry" approach. I won't use ATMs and especially not debit cards for the same reason. I remember back before the financial crisis suggesting that people not keep all their money in one bank being called a "Chicken Little." I didn't care. I sleep very well at night, and I'm sure you do too.

[scfr]

3. People still pay by check?

Less and less, but there are still some circumstances when people may want to pay by check. I could pay my property tax or car registration renewal on-line but would have to pay a fee. I pay my federal estimated taxes by check, probably more out of habit than necessity. I pay the state my quarterly franchise fee for my little bit of self-employment income by check. I also write checks for gift contributions to the niece & nephew's 529 college funds, general gifts (holiday, birthday, graduation, sympathy), and charitable contributions. When I donate to charity I want the charity getting 100% and not have any of it lost to fees!

[tripods68]

There's another way to get rid of that lender, which is get that mortgage paid off, and you are already working on that. Keep it up tripods68!

I applaud you for sticking to your guns about not sharing your bank information with a collection agency, even if lots of other people say "so what?"

There is nothing wrong with a "better safe than sorry" approach. I won't use ATMs and especially not debit cards for the same reason. I remember back before the financial crisis suggesting that people not keep all their money in one bank being called a "Chicken Little." I didn't care. I sleep very well at night, and I'm sure you do too.

Thanks scfr!

I think too many people forgets information is valuable especially your bank account. People should be far more cautious.

[disneysteve]

There is nothing wrong with a "better safe than sorry" approach. I won't use ATMs

I'm curious why you consider ATMs to be unsafe. It is far safer to use an ATM than to use a teller. The likelihood of errors occurring or of a bank employee doing something nefarious with your information is far greater when using a human teller.

[Nutria]

I'm curious why you consider ATMs to be unsafe.

ATM skimmers. http://krebsonsecurity.com/all-about-skimmers/

[Nutria]

Web bill payment

Strong recommendation to set up automatic payments using you're bank's web site. It should have a way to electronically pay bills, which "pushes" the money to the mortgage company via "EDI" (electronic data interchange).

It's not a "pull" from the mortgage company's end, which you are rightly afraid of.