Mortgage Servicing... Is this legal? Will not apply extra payment to principal unless I pay before the 1st.

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So our 2nd mortgage was just sold to 21st Mortgage by GMAC.

I made my first payment to 21st, and received a letter stating that my payment is being held in an overage account because it is enough to make a full payment.

I called to find out what the letter meant and was concerned that there was an issue with my payment.

After speaking to my account "rep", he told me that he will apply my extra to the principal this time, but they have system limitations that require the payment to be made before the first or it cannot be put towards the principal. We have never been late on a payment, never had a modification or any other issues with the 2nd so it is not like I have a special circumstance that would require something like this.

I pay all bills on the 1st and the 15th, depending on when they are due. I guess I could pay my 2nd mortgage on the 15th prior to the month instead of on the 1st, but I do not think I need to change my bill paying habits because of their system limitations.

I will get out my mortgage paperwork and try to find the clause about principal, but was wondering if lenders are allowed to do this. Can they force me to pay before the first if I plan on paying additional each month?


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My mortgage was with GMAC as well, and got sold to Green Tree.

I feel, and only from personal observations and reading other people's accounts with companies who picked up GMAC loans after bankruptcy... a lot of them are unfriendly companies.

I've had a LOT of problems with Green Tree... everything with them costs money and their online site is terrible. $15 to pay by phone. I cannot pay anything online anymore [$15 fee as well], plus I cannot get any transaction history data, etc.

just terrible.

Okay, sounds like what they are saying is they cant apply your payment toward principle while the current mo. payment is still outstanding. If you are sending in extra it should be notated as principle reduction on check, otherwise they may still put it in suspend, until they know your intent. If that's not what they are saying, when would you be able to send extra, as once one payment is made the next one would become due.

Did you include the payment "coupon" indicating how to direct the extra funds?

My GMAC servicing was assigned to "Ocwen." Interesting to hear how it is going for others. I was very concerned when I read up on their practices and learned how they use off-shore account reps. So far though it has been great. They appear to use the exact same backend on their website from GMAC; the only thing that has changed is the logo and the URL. They even managed to handle my hastily-mailed Citi Thankyou rewards mortgage checks that were addressed to GMAC.

Ocwen bought mine too, my automatic bi monthly payments are still working. I noticed the bill they send is the same as GMAC but different logo. I had heard Ocwen was a subprime lender which made me a little nervous. What's sad is they probably bought my loan for 20-30%. I know a person that bought 800 of these loans in MI for .12c on the dollar but those were non performing. I was hoping she could buy mine but it didn't come up for her to buy.

I send my payment electronically, so there is no way to separate the amount unless I send in a 2nd payment.


Same exact situation here, except the customer service rep was rude. By far my worst experience with loan servicing in my life.

I'm thinking about making 50 or so electronic payments to see if I get 50 letters....

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