Ask Our Broker With Peter G. Miller: Tripped Up
Question: We went on a trip and to assure our mortgage was paid, we sent the lender two checks, one for the current month and one for the next month when we would be out of town. When we returned they claimed we only made one payment and that we missed the second payment, owed them a late fee and on top of everything reported the “missing payment” to the credit bureaus. What went wrong and what can we do about it?
Answer: Each month you send in a payment coupon, which shows such basic information as the loan number, the current payment due, the total payment due and how much will be owed with a late payment if you do not pay by a certain date. In addition there will typically be several other lines for such things as additional principal, late charges, other charges and additional escrow.
Unfortunately the betting here is that one of several things happened:
First, the lender somehow did not cash the second check. Speak with your bank to make sure both checks were cashed. If that's the case, get copies of the front and back of both checks so you can show them to the lender.
Second, if both checks were cashed then you have to wonder what the lender did with the money. It has to show up somewhere.
If the payment form was not properly filled out or there were no instructions, it's probable that the lender regarded the second check as an additional principal or escrow payment. It will appear that you made the first monthly payment as well as a significant addition for principal or escrow.
Lenders handle millions and millions of mortgage transactions every month and it follows that in some cases mistakes are made. The best approach in the situation is to call the loan servicer, and ask if someone can help you. Explain – nicely – that a mistake has been made and ask how it can be corrected.
If the credit is in the wrong place they may be able to simply correct the error, take off the late fee, and remove the credit ding. If their records incorrectly show that they did not cash the second check and your bank has evidence that it was in fact cashed you can present them with the check copies that you have.
In the future, call the lender and explain that you would like to make two payments, one for the current month and one for following month because you will be traveling. However, if the lender cannot accept the payment in advance, write out the check, make sure it indicates that it's for payment for the second month, stick it in an envelope with the right payment coupon, and ask a responsible friend or family member to mail it for you on a given date.
Peter G. Miller Peter G. Miller is author of "The Common-Sense Mortgage," (Kindle 2016). Have a question? Please write to email@example.com.
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