Paying off mortgage yields aggravation

Lynn Garner wasn't exactly thrilled with her GMAC mortgage. After sparring with the finance company for months over insurance issues, the North Aurora resident decided in January she had seen enough.

[Buddy]

Ms. Garner did contribute significantly to this problem. Mr. Yates and GMAC were being courteous in not casting blame on the customer, but one key lesson here that should be pointed out in the article is, if you want to pay off a mortgage loan, you don't just send the lender a cashier's or personal check for the balance you believe is due. That often creates problems like this. You're supposed to call the lender and ask for "the payoff amount". You'll be quoted a total that will be due by a specific date in the near future, and then you preferably electronically wire that amount on that date from your bank or broker, or if you don't want to do that, you Express Mail or FedEx Overnight a check to arrive by that date. And yes, it goes to a specific and different payoff address, NOT to the regular address you send loan payments. If Ms. Garner had done those things, this mess wouldn't have happened.

[Ed G]

Typical of GMAC, "a perfect storm of glitches." How about accepting responsibility?

[Jeremy Chicago IL]

Funny....I had my own "perfect storm of glitches" when this same company didn't record my electronic draft payment....took 3 months to sort out and hours on the phone.....they had horrible customer service. One rep simply suggested I send in another (additional) payment in place of the lost one.

[not buying it]

Buddy wrote:

Ms. Garner did contribute significantly to this problem. Mr. Yates and GMAC were being courteous in not casting blame on the customer, but one key lesson here that should be pointed out in the article is, if you want to pay off a mortgage loan, you don't just send the lender a cashier's or personal check for the balance you believe is due. That often creates problems like this. You're supposed to call the lender and ask for "the payoff amount". You'll be quoted a total that will be due by a specific date in the near future, and then you preferably electronically wire that amount on that date from your bank or broker, or if you don't want to do that, you Express Mail or FedEx Overnight a check to arrive by that date. And yes, it goes to a specific and different payoff address, NOT to the regular address you send loan payments. If Ms. Garner had done those things, this mess wouldn't have happened.

You aren't seriously blaming the customer because GMAC read the check wrong are you? Many people aren't familiar with wire transfers or even sending Fed Ex's. She mailed a payment and the mortgagee screwed it up.

[The Truth]

I call BS on the whole explanation by GMAC. The discrepancy between the amounts should have triggered action on their part. Other elements of their "story" are also troubling. But the most incongruent thing is that they are going to forgive over $1,000 in interest and insurance costs. Something is wrong there. If I were the borrower, I would check my statements verrrry carefully.

[Buddy]

not buying it wrote:

<quoted text>
You aren't seriously blaming the customer because GMAC read the check wrong are you? Many people aren't familiar with wire transfers or even sending Fed Ex's. She mailed a payment and the mortgagee screwed it up.

GMAC could have handled this better, no doubt. But the borrower did shoot herself in the foot by not calling GMAC first and getting payoff instructions. 99 times out of 100, if you send a check to the lender for the total amount your bill may show is still owed on the loan, to the same address you are sending your mortgage payments, you are going to cause a serious snafu in your account, because you'll send the wrong amount the wrong way to the wrong place and the clock keeps running while your account piles up new charges because it won't be credited properly. The amount you still owe on a mortgage changes *daily*. That's why you must use certified, time-sensitive payment methods like wire transfers or certified checks, whether you have experience using them or not. Ordinary presonal checks mailed by first class mail to regular account proccessing addresses don't work. As the article said, most mortgage loans are paid off when ownership is transferred, and then, you pay fees as seller of the home to have the trust company closing the sale to handle all this for you. If you want to do it yourself, you can, but there are specific procedures you have to follow so it's done right. Mailing a regular check is wrong.

***To save yourself a lot of grief like this borrower endured: call your lender first and get instructions and follow them carefully when you want to pay a loan off early.***

[Ken]

Not taking sides but I've been thinking about paying my mortgage balance off and know enough to call first before sending in a check.

This doesn't excuse GMAC from not providing satisfaction.

[William]

I had a similar problem with Bank of America, I paid off my mortgage, and had $1200 in my tax escrow which took a year to get back from them.

[kevlar128]

Buddy wrote:

<quoted text>
GMAC could have handled this better, no doubt. But the borrower did shoot herself in the foot by not calling GMAC first and getting payoff instructions. 99 times out of 100, if you send a check to the lender for the total amount your bill may show is still owed on the loan, to the same address you are sending your mortgage payments, you are going to cause a serious snafu in your account, because you'll send the wrong amount the wrong way to the wrong place and the clock keeps running while your account piles up new charges because it won't be credited properly. The amount you still owe on a mortgage changes *daily*. That's why you must use certified, time-sensitive payment methods like wire transfers or certified checks, whether you have experience using them or not. Ordinary presonal checks mailed by first class mail to regular account proccessing addresses don't work. As the article said, most mortgage loans are paid off when ownership is transferred, and then, you pay fees as seller of the home to have the trust company closing the sale to handle all this for you. If you want to do it yourself, you can, but there are specific procedures you have to follow so it's done right. Mailing a regular check is wrong.
***To save yourself a lot of grief like this borrower endured: call your lender first and get instructions and follow them carefully when you want to pay a loan off early.***

No, it isn't.

Mailing a check is absolutely correct.

Everything after that is wrong and on GMAC.

Be wary of any company that wants you to jump through hoops just to pay them.

You must be in "customer service" at one of these large customer unfriendly businesses.

[900 Major Problems]

.03% of 3,000,000 loans equals 900 !!
So, GMAC admits their use of automation which lacks quality control results in 900 cases per year of problems similar to this couple.
How pathetic. It is no wonder the financial industy has decimated itself and the world economy over the past few months.

[Steve]

Buddy wrote:

<quoted text>
GMAC could have handled this better, no doubt. But the borrower did shoot herself in the foot by not calling GMAC first and getting payoff instructions. 99 times out of 100, if you send a check to the lender for the total amount your bill may show is still owed on the loan, to the same address you are sending your mortgage payments, you are going to cause a serious snafu in your account, because you'll send the wrong amount the wrong way to the wrong place and the clock keeps running while your account piles up new charges because it won't be credited properly. The amount you still owe on a mortgage changes *daily*. That's why you must use certified, time-sensitive payment methods like wire transfers or certified checks, whether you have experience using them or not. Ordinary presonal checks mailed by first class mail to regular account proccessing addresses don't work. As the article said, most mortgage loans are paid off when ownership is transferred, and then, you pay fees as seller of the home to have the trust company closing the sale to handle all this for you. If you want to do it yourself, you can, but there are specific procedures you have to follow so it's done right. Mailing a regular check is wrong.
***To save yourself a lot of grief like this borrower endured: call your lender first and get instructions and follow them carefully when you want to pay a loan off early.***

GMAC had already proven themselves unable to deal with seemingly simple situations like her insurance snafu -- one could see why she'd be fed up and just want to pay off the dang loan and get GMAC out of her life...

And, unfortunately, you're right in advising that she handled the situation improperly and "shot herself in the foot" -- part of the problem that she didn't realize is that GMAC, and so many other companies, either hire clerical staff who never need to think (i.e. gee, this is a big check, she must be trying to do something...) or replace those non-thinking clerical staff with automation that has even less ability to think...

It's sad that "simple" folk don't understand that if you want to deal with a problem with your payment, you call Bombay... If you actually want to pay off your loan in full, you call Bangledesh... Beyond the fact that GMAC screwed up the first step, and that didn't even allow them to "trigger a review" of the account -- even when a rep realized that they had received a $97,000 check from her one would think they may have been able to determine something was amiss when she still has an $87,000 balance -- but, beyond not needing to actually think, the reps are cut too thin to have time to actually put pieces of a puzzle together...

It's rather disgusting -- but it's the way life is now -- and like the other commenter, I find it sad that you can find more fault with the customer than with GMAC... You sound like someone in the business making excuses for inept, incompetent and poor customer service provided by GMAC...

[Buddy]

The Truth wrote:

I call BS on the whole explanation by GMAC. The discrepancy between the amounts should have triggered action on their part. Other elements of their "story" are also troubling. But the most incongruent thing is that they are going to forgive over $1,000 in interest and insurance costs. Something is wrong there. If I were the borrower, I would check my statements verrrry carefully.

Since she's paid off her loan, she's not likely to get any more statements from GMAC that would help her sort out if the proper amount was credited. The interest GMAC is forgiving would be interest that would have been racked up since her last payment. The insurance they said she owed would be escrow money that no longer needs to be corrected, and if GMAC collected it and used it to pay homeowners insurance, the insurance company would have to refund it to the homeowner anyway, so it's a wash on both counts. GMAC isn't losing money by forgiving these "debts" which never really piled up anyway, and she isn't gaining anything, either.

What she'd really better check in a few months is her credit report. If GMAC cashed and retroactively credited final payment as of February 3rd but didn't get her account corrected until March, she might have had a mark against her account for a late payment mistakenly recorded. She shouldn't, but she might. If that hits her credit record, it could cost her money later for even unrelated things like her car insurance payments. If an improper late payment is shown because of what happened in February, she should contest it and get it corrected.

The other thing she should do is check in a few months with her county recorder of deeds office, to be sure that GMAC shows the lien for their loan removed from the deed to her property. Otherwise-- particularly if GMAC has since gone out of business, which would hardly be a surprise-- she or her estate or her heirs could hit another roadblock when the property is sold. Sometimes lenders file the mortgage as paid with the county, and sometimes they send the paperwork to the borrower and expect the borrower to do it, but either way, the homeowner should follow up with the county a few months after a mortgage is paid off and be sure that the payoff has been recorded in county records.

[Buddy]

kevlar128 wrote:

<quoted text>
No, it isn't.
Mailing a check is absolutely correct.
Everything after that is wrong and on GMAC.
Be wary of any company that wants you to jump through hoops just to pay them.
You must be in "customer service" at one of these large customer unfriendly businesses.

Nope. I don't work in customer service or have any ties to financial companies. But I paid off two mortgage loans in the last six months, one at the end of the loan, one early, neither with GMAC. One was with Fifth Third Bank, and the other with Countrywide Financial. Both companies had very specific procedures for mortgage payoff involving wire transfers or overnight express payments with certified checks, due on a specific date, to a different address. Mailing a check for my calculation of the balance due on the loan to the regular payment address would have caused serious problems like she had.

If you think your lender is any different, I bet you're wrong. ASK THEM: can I just send you a check next month for the balance due to pay off my loan? They will tell you it won't work the way you think, because the balance due changes each day and they have to get it right, to the cent, to balance their books.

In my posts in this thread, I've clearly said, GMAC was at fault here, and they admitted it to Mr. Yates. But this customer also contributed to the problem by not going through channels to pay off her loan the right way. You call it jumping through hoops, and I don't disagree, but this is how home mortgage lenders handle payoffs. So now that you know better, I hope you won't make her mistake.

[what a joke]

that is ridiculous. And then they look into it but don't tell the customer, just continue to rack up charges.

What if she never wrote you? How many more months would it have taken?

[what a joke]

"But this customer also contributed to the problem by not going through channels to pay off her loan the right way. You call it jumping through hoops, and I don't disagree, but this is how home mortgage lenders handle payoffs."

Oh yeah and everyone knows that don't they? The lenders make it so clear that you don't send your last check the way you sent all the others.

[Joey]

The short answer is that GMAC, like most, don't give a rats ass. You're wrong until THEY say you're right. And that's it. And screw you.

And as for that jerk taking about Fed-Exs and payoff letters and blah blah. She sent money in on a mortgage, apply the money to the mortgage, figure that new number. It is what they are supposed to be doing.

Even then, you can't get an "I'm sorry" from these s.o.b.'s. Just more excuses about their failure rate and more crap. Who cares? GMAC screwed up. But they will NEVER say they were wrong, or I'm sorry.

And this newspaper guy is always making excuses for these companies. Just document what happens and let the reader figure out that customer service doesn't exist at places like GMAC.

[not buying it]

Buddy wrote:

<quoted text>

In my posts in this thread, I've clearly said, GMAC was at fault here, and they admitted it to Mr. Yates. But this customer also contributed to the problem by not going through channels to pay off her loan the right way. You call it jumping through hoops, and I don't disagree, but this is how home mortgage lenders handle payoffs. So now that you know better, I hope you won't make her mistake.

No, you said, "Ms. Garner did contribute significantly to this problem. Mr. Yates and GMAC were being courteous in not casting blame on the customer,". That implies that the customer WAS at blame, and Mr. Yates was just being courteous when he didn't point that out.

The fact is, the customer did what she thought was right, and GMAC blew it. Many people do know that final payments need a call to the lender - but many borrowers are not sophisticated, and lenders should be prepared to deal with it.

[Sarah]

GMAC is the worst. I had my real estate tax escrow recalculated by them 3 times last year (as part of their own process) which left me having to pay extra money that was way more than needed. Each time I tried to explain to the representative that I was being over charged but the people there seem to have no understanding of how mortgages or the escrow process works. So, now I've put in more money than I needed to, which they eventually realized, which could have gone to something else. And I don't trust them to send me a refund check.

[Glum]

kevlar128 wrote:

<quoted text>
No, it isn't.
Mailing a check is absolutely correct.
Everything after that is wrong and on GMAC.
Be wary of any company that wants you to jump through hoops just to pay them.
You must be in "customer service" at one of these large customer unfriendly businesses.

You are wrong. Check the mortgage bill you receive each month(if you get one). It clearly states the instructions and a phone number for early payoff. People can't/don't read instructions anymore.

[Aisle Sitter]

my student loan website has a link for the payoff amount. even my car loan said to call/visit the bank for payoff amount. not only that, but only the person on the loan could call in to get the payoff amount.

we decided to rearrange our debt, and i had a day off, so i went to the bank to get the payoff amount. the car loan was in my husband's name, and they wouldn't even tell me.(you'd think that they would tell someone trying TO GIVE THEM money how much was left....)