Add'l principal funds not credited?

[kawh]

I'm awaiting discharge of chapter 7 filed in September. I usually pay a little extra, maybe $20 or so, toward the mortgage principal, to get it paid off a little sooner.

Last month I paid it thru my bank's billpay, since the mortgage company won't let me pay online (and what's up with that silliness?). I paid just the base amount, because there was no way to tell them electronically how I wanted the extra applied.

This month, I went ahead and paid a few extra dollars, since I read the fine print on my statement and it says that if not designated, any extra funds will be applied first to late fees (there aren't any), then the principal.

Well, the extra money seems to be in limbo somewhere. It's not reflected in the principal amount, it's not in the escrow either. Their website does show the total amount I paid, but the new principal amount and the new escrow balance show it wasn't applied to either one, hmmm.

I'm afraid to call a real person to ask, since I have a feeling that so far, everything that's happened to me has been automated. This same company that holds my my mortgage, also was left holding some not-so-small amount of my credit card debt. I don't want them to notice me at all, if you know what I mean.
But I know my account is now being serviced by their bankruptcy department, because it says so on the statement, which also says certain parts of the statement are missing for "convenience," and talks about my "Chapter 13 Plan, if applicable." Just automated stuff, that.

Anybody know what's going on with the extra principal that seems to have disappeared?

[keepsmiling]

I don't have an answer for you, but I can tell you that you are not the first person here to tell this story. Seems the banks just can't or won't deal with this. It's just another one of those dumb things; but maybe a phone call to someone (preferably higher up) will help.

Hopefully others who have been there have resolved the issue and can help.

[tobee43]

i would hold off paying any extra on your principal, as somehow they find some way to use it towards some type of fee while your in the process of bk. during that time i'm certain you most likely did not pay for the few months while your were filing and it most likely racked up some type of fee that they now will apply it to.

again i would hold off until the bk is over i'm assuming you are paying and staying?

[HHM]

Because you're in bankruptcy, the account is in a type of hold.

What they did "hopefully" is put the extra amount into the "suspense" account. The suspense account is a holding account for the mortgage servicer. Since you are in active BK, any extra money the bank receives goes into suspense. Once you receive your discharge, you will "probably" see the amount applied to principal at that point.

[tobee43]

one would hope!

[LadyInTheRed]

When my rate adjusted down causing my payment to increase, I kept paying the old amount until I noticed it wasn't being applied to principal even though the fine print on the promissory note and on the statement itself says that over payments will get applied to principal. Statements called it an unapplied credit. I called the Bank of America bankruptcy department and they told me that if I want extra payments applied to principal, I'd have to call them after every payment and they might transfer the unapplied credit to principal. It is up to their discretion. It took a couple of phone calls to get the over payments I already made applied to principal. So, I stopped making the extra payments.

[kawh]

Thx to all for replying, I will not pay extra again til I find out where it went, after discharge. It's not much $, but you'd think their website would show it. Guess I can put a lid on my curiosity til Dec 10th, the last day for objections.

[mlsj2009]

Thx to all for replying, I will not pay extra again til I find out where it went, after discharge. It's not much $, but you'd think their website would show it. Guess I can put a lid on my curiosity til Dec 10th, the last day for objections.

kawh, you seem to be financially disciplined enough to make an extra payment monthly. So, if there is a question in your mind as to whether or not the mortgage company will treat your extra principal amount like they should while you are in bankruptcy, why not set the amount aside in a special banking account and use a lump sum payment of the accumulated amount toward the principal at the end of your bankruptcy. With your new found discipline, that should be no problem for you, and it will reduce the principal by a little more because of the interest you will accumulate with the special savings account created for the purpose.