Bi-weekly/Weekly Mortgage Payment Fraud & Scam Lawyers
Bi-Weekly and Weekly Mortgage Payment Fraud
Have you been offered a Bi-Weekly Mortgage Plan (or weekly plan) by your bank or mortgage servicer? Have you been paying Bi-Weekly Mortgage payments for several years and can’t figure out whether you’ve received any benefit?
Bank and mortgage servicers use terms like “Accelerated Payoff Program,” “Power Pay Plus,” “Interest Minimizer” or “AutoPayPlus” to advertise Bi-Weekly Mortgage programs and promise “to reduce your loan balance more quickly than scheduled” or “reduce interest and shorten the term of the loan.”
On the surface, a Bi-Weekly Mortgage Plan seems great. Your bank or mortgage servicer automatically deducts your one half of mortgage payment every two weeks and applies that payment to your mortgage. Since standard mortgage loans require one payment every month, and because there are 52 weeks in a year, if you make 26 biweekly payments over the course of a year (the equivalent of 13 monthly payments) you should have an extra payment at the end of the year which is supposed to be applied to the principal. If that extra payment is applied directly towards your principle balance - not interest, you are shaving approximately 9.1 years off a 30 year mortgage loan and saving tens of thousands of dollars in interest. Weekly plans are supposed to work the same way and provide the same benefit.
But what if your bank or mortgage servicer doesn’t apply that extra payment to your loan at all? The result is that after several years, your bank or mortgage servicer is holding and using for their benefit, several thousand dollars of your money. Further, you have received no reduction in principal and are still on track to pay your mortgage for the full term. You’ve simply let the bank use your money.
Some enterprising third-party companies, that are not your bank or mortgage servicer, also advertise to set a Bi-Weekly payment for you. They debit your account every two weeks and send your payment to your bank or mortgage servicer. But, they charge a “set-up fee,” typically around $1,000.00 and “processing” fees of up to $3.50 a payment that adds close to $90 a year on average to essentially transmit an extra payment to your bank. For the first several years of enrollment, typical consumers pay more in fees to this third-party company than they save through the program.
If you think you’ve been a victim of either of these practices, we can help. We have experience in litigating this issue and accept cases on a contingency fee basis. Contact us for a free no obligation consultation. We handle these cases nationwide.