5 ms·

They can't change the terms of your mortgage though, can they? If not it doesn't matter much because things cannot get any worse for you.

JohnFen 3y ago
I think who you are doing business with matters a great deal even if the mortgage terms don't change. You're still being forced to do business with someone that perhaps you strongly object to doing business with. The company matters just as much as the product or service.
- lotsofpulp 3y ago
  Who you are doing business with can change even if the legal company is the same. Suppose an executive retires, and a new one wants to make their mark, perhaps by cutting costs.
gigel82 3y ago
When my mortgage was sold to a big bank I started getting charged a fee for "prepayment" (basically I'd do another payment against the principal once a year or when I had extra cash, which was a non-issue before the sale). Refinanced with a local CU and stayed with them ever since.
- lotsofpulp 3y ago
  Is this in the US? I would be very surprised if the prepayment (or any) terms are allowed to be changed. If in the US, I would be surprised to find out about prepayment penalties at all. https://money.usnews.com/loans/mortgages/articles/what-is-a-loan-prepayment-penalty https://money.usnews.com/loans/mortgages/articles/what-is-a-... > A lender cannot assess a prepayment penalty unless the penalty was included in the original terms of the loan. > According to the Federal Register, Dodd-Frank Act provisions “generally prohibit prepayment penalties except for certain fixed-rate qualified mortgages where the penalties satisfy certain restrictions and the creditor has offered the consumer an alternative loan without such penalties.” > For lenders that do charge these penalties, prepayment penalties cannot be imposed after the first three years of the loan term.
- jjav 3y ago
  > When my mortgage was sold to a big bank I started getting charged a fee for "prepayment" Are you sure? Whether a mortgage has prepayment penalties or not is one of the things that is specifically declared in every mortgage contract I've ever seen. They can't just change it after the fact.
wombatpm 3y ago
Yes they can. I had a mortgage that was sold to Washington Mutual (no longer in business). They did an audit of my escrow account and sent me a check for $2000. I called and said this seems to be mistake. They said no. OK then. Two months later I get a notice from the county that the second half of property taxes was overdue. WaMu pays after several phone calls. Then sends me a notice that my escrow account is $5000 in appears. So WaMu says that the 2000 was a mistake and I need to send that back, and that they are allowed to maintain an excess balance for taxes and insurance, so I need to send them another 3000 to bring the account current. I refinanced with a different organization that week. I was very happy to see them crater during the financial crisis.
- lotsofpulp 3y ago
  That is a shitty mortgage servicing operation, not changing the terms of service.
  - Dylan16807 3y ago
    You don't think another company coming in and demanding $3000 be paid early is changing the terms? Whatever you want to call it, it's bad. Even if it was authorized before, it's a very significant change to start demanding it. The practical terms have changed.
    - lotsofpulp 3y ago
      I assume every mortgage has terms to include funding an escrow account with the next ~12 +/- 6 months of property tax + insurance. For sure, there is an adverse impact to a borrower who is not well versed in how mortgages work, but in terms of financial agreements, but unfortunately, the US does not punish financial companies for negligence in customer service.
      - Dylan16807 3y ago
        The old company wasn't using that term, though. I think activating a major term is reasonable to talk about as a change.

JohnFen 3y ago

I think who you are doing business with matters a great deal even if the mortgage terms don't change. You're still being forced to do business with someone that perhaps you strongly object to doing business with. The company matters just as much as the product or service.

lotsofpulp 3y ago
Who you are doing business with can change even if the legal company is the same. Suppose an executive retires, and a new one wants to make their mark, perhaps by cutting costs.

gigel82 3y ago

When my mortgage was sold to a big bank I started getting charged a fee for "prepayment" (basically I'd do another payment against the principal once a year or when I had extra cash, which was a non-issue before the sale). Refinanced with a local CU and stayed with them ever since.

lotsofpulp 3y ago
Is this in the US? I would be very surprised if the prepayment (or any) terms are allowed to be changed. If in the US, I would be surprised to find out about prepayment penalties at all. https://money.usnews.com/loans/mortgages/articles/what-is-a-loan-prepayment-penalty https://money.usnews.com/loans/mortgages/articles/what-is-a-... > A lender cannot assess a prepayment penalty unless the penalty was included in the original terms of the loan. > According to the Federal Register, Dodd-Frank Act provisions “generally prohibit prepayment penalties except for certain fixed-rate qualified mortgages where the penalties satisfy certain restrictions and the creditor has offered the consumer an alternative loan without such penalties.” > For lenders that do charge these penalties, prepayment penalties cannot be imposed after the first three years of the loan term.
jjav 3y ago
> When my mortgage was sold to a big bank I started getting charged a fee for "prepayment" Are you sure? Whether a mortgage has prepayment penalties or not is one of the things that is specifically declared in every mortgage contract I've ever seen. They can't just change it after the fact.

wombatpm 3y ago

Yes they can. I had a mortgage that was sold to Washington Mutual (no longer in business). They did an audit of my escrow account and sent me a check for $2000. I called and said this seems to be mistake. They said no. OK then. Two months later I get a notice from the county that the second half of property taxes was overdue. WaMu pays after several phone calls. Then sends me a notice that my escrow account is $5000 in appears. So WaMu says that the 2000 was a mistake and I need to send that back, and that they are allowed to maintain an excess balance for taxes and insurance, so I need to send them another 3000 to bring the account current. I refinanced with a different organization that week. I was very happy to see them crater during the financial crisis.

lotsofpulp 3y ago
That is a shitty mortgage servicing operation, not changing the terms of service.
- Dylan16807 3y ago
  You don't think another company coming in and demanding $3000 be paid early is changing the terms? Whatever you want to call it, it's bad. Even if it was authorized before, it's a very significant change to start demanding it. The practical terms have changed.
  - lotsofpulp 3y ago
    I assume every mortgage has terms to include funding an escrow account with the next ~12 +/- 6 months of property tax + insurance. For sure, there is an adverse impact to a borrower who is not well versed in how mortgages work, but in terms of financial agreements, but unfortunately, the US does not punish financial companies for negligence in customer service.
    - Dylan16807 3y ago
      The old company wasn't using that term, though. I think activating a major term is reasonable to talk about as a change.