Monday, June 24, 2013

Never Assume Anybody Knows What They're Doing

This should be the happy coda to my long mortgage refinance story, but it's not. Why? As they say, denying all responsibility, "Mistakes were made."

Mistake #1. Despite receiving the hazard insurance on our home when funds were disbursed after the closing, our insurance company went ahead and billed our new mortgage servicer all over again.

Mistake #2. Despite it being uncommon not to prepay out of already accrued escrow such things as home insurance during a refi closing, and despite having its own copy of the closing papers, our new mortgage servicer paid the double bill without questioning it, thus completely depleting our escrow.

Mistake #3. I sent a large check, separately from the regularly monthly mortgage payment, specifically designating it to be applied to principal only. Instead, the new mortgage servicer decided to apply it to our next month's regular mortgage payment.

Mistake #4? We gave up waiting for the invoice for the mortgage payment due July 1, so we sent the payment anyway. What are the chances that the mortgage company decides to credit it to the wrong month's payment? Or the now negative escrow? Or who knows what?

Mistake #5. When our insurance company received the excess payment, instead of questioning it, they applied it to our car insurance bill, which wasn't due for another month, and was for a different amount. Then they sent us a refund check for the difference, without any explanation.

Mistake #6. Well, that's still to come.

A lot of people are working for companies so large that they can't even begin to challenge an incorrect communication such as the double billing from the insurer. Despite demanding that I recite my name, address, telephone number, and e-mail address over and over during every phone call, these companies never bother to pick up the phone or shoot me an e-mail and ask, "Hey, what's up with this? Seems a little odd." I'll say it's odd.

These employees are not being paid to get things right. They're paid to get the money, or pay the money out, but never to think about what the transaction means. It would be sad if it weren't so frustrating for all concerned. The only redress the insurance company offered was to send us the car payment as a refund, which of course we would then have to turn around and pay anyway next week. The jury's out on whether the mortgage company will credit our extra payment to principal, or try to weasel out of doing that based on stupidly paying the double insurance bill. And eventually, we'll have to cough up roughly the amount of our car payment to rebalance the escrow. What a mess. 

This is yet another reason that some people are willing to stay with their old, overpriced mortgage, rather than fall into the hands of an incompetent company. Or in this case, two incompetent companies.

What can we learn from this experience? Not much. Keep on top of your bills. Pay attention when they don't show up on time. When random checks arrive, find out why. And be ready to spend a lot of time on the phone straightening things out. You are the only one who can. You're also the only one who cares.