Mortgage horror stories
All letters were written in response to our series: Halloween horrors
Bankrate.com

Names have been masked to protect the ghoulish

• One year, we sent in a mortgage payment in June. Our next statement showed the credited payment. In December of that year, we get a letter explaining that they have no record of our payment. We send in the statement and they contact us back and admit that they received the payment but never cashed the check and the check had been lost. We were then told we must make an additional payment in December to avoid "penalties." Like an additional payment in December is an easy thing to do. Well, we made the payment and never saw the original check returned.

• A while back, I was looking to pay off my mortgage in full. I called my mortgage holder and asked if there was a discount for doing so. A friend told me many companies do this. I was told that I could get up to a 10 percent discount if I paid my mortgage in full! Imagine my surprise when I was told that I was not eligible for the discount since I had never missed any of my payments! I was told the discount was only for people who were often late with their payments because these people were higher risks! I was actually told "Oh, you're such a great customer, we know you'll make all your payments on time." I was shocked to learn that the discount was only given to bad customers and not the people like myself, who struggle each month to get the payments in on time. Unbelievable.

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• I wanted to take out a loan for $500 from my bank. I was rejected because of my credit report. I received it, found some errors, corrected them and reapplied for the loan. I was turned down again -- this time because my income was not high enough with just my name on the mortgage.

  We got a divorce. I signed over a quick claim deed, deposited $13,000 into my account and re-applied again. This time I was turned down because of no credit history! Now, I have a credit card in just my name, re-applied again and was turned down again because the mortgage company didn't take my name off the mortgage of our home even after I signed a quick claim deed! Finally, that took the cake!

  I had one question for my attorney -- do I own a home and also rent? She didn't know! Now, I keep my money outside a bank and will never reapply again!

• At the ripe old age of 40, my husband and I bought our first home one year ago. Having heard so many horror stories prior to our purchase, we were very surprised at the ease in which every thing went during our application and closure. We had to take out a second mortgage with our financial institution, however, to pay for incidentals at closing. We ended up with two loans, one (the smaller of the two) was automatic withdrawal and the other was a mail-in payment.

  After six months, I was horror-stricken when I received a certified letter stating my home and land would be put up for auction in the near future for my failure to pay three months of house payments! After pulling myself off of the floor, I managed to calm myself down long enough to call our esteemed bank. A nice young lady laughed and said, yes, our payment had not been received for three months, but the problem was with the bank. They had "inadvertently" applied our major mortgage payments to the second mortgage AFTER SIX MONTHS OF PAYING IT CORRECTLY! I was livid! The best part? The young lady indicated that it happens all the time and it was just a little glitch ... and it was usually funny (how it turned out) Funny!?! I practically had to call 911 when I got that notice! This happened five months ago and my credit is screwed up. The bank's (explanation) is "It's just a little glitch."

• I own and operate a title insurance company in South Florida. Every time a hurricane or big tropical storm comes anywhere near here, the lenders refuse to fund. This has happened even after we have closed some deals. I had to call the parties back to my office and explain that there was no funding. This was in spite of the fact that these purchasers had homeowners insurance. The insurance companies stop writing binders five to six days before the hurricane will (potentially) strike. During Hurricane Georges, we could not do any business beginning on Monday even though the hurricane (which never came close to this area) was not set to strike this area until late Friday (of that week). It's very frustrating and difficult to explain to people who are purchasing homes.
  
• Several years ago, I had a mortgage with Ghastly Company in Kansas City, Mo. Ghastly was once big in Texas, but when the economy went south in the early 1980s, they pulled out (of the state).

  I made my payment every month in a timely manner, only to be notified on every subsequent statement that I was being charged a late fee because they didn't receive it on time. (It sounds like) the same trick that the credit card companies like to pull now. It is amazing that I can send a Mother' s Day card across the country in three days -- maximum -- but it always takes more than a week for my payment to be posted to my statement. It got to the point that I eventually had to send every mortgage payment by registered mail so that I had proof of when I mailed the check and when they received it.

  Standing in line at the post office, I met may others doing the same thing. The mortgage company feels that they could just not post payments until after the due date and charge late fees ...

• We had a very unique property for sale. We had a deposit from a buyer for our home at our asking price of $189,900. When the buyer called the bank to find out about mortgage loans, the loan officer told them our property was only worth about $130,000. The loan officer had never seen our home or had it appraised but he just quoted a price from the description the buyers gave him over the phone. The buyers backed out. We had the home appraised between $191,000 and $196,000. But it was too late, they bought another property. They admitted they liked our place better but the loan officer scared them off. That was over two years ago and we still haven't sold our home.
  
• While surfing the Internet for current mortgage rates, I typically click on the link to the lender with the lowest rates. This bank's Web site had a link where you would enter your name and telephone number in so that a loan officer would contact you. Despite the fact that they asked for my home phone number and the best time to call, the loan representative decided to call me on a Sunday evening at 6 p.m. at my job!

  Of course no one was in the office, so he had to leave a voice mail message. And of course, I share a voice messaging system with several of my colleagues. Needless to say, the entire department learned exactly what type of mortgage loan I was interested in applying for as well as the exact dollar amount! That gave everybody something to talk about for a few weeks.

  I truly did not appreciate the tactlessness of the bank rep. By him specifying the amount for which I was pre-qualified really let everyone know my personal business. I have opted not to deal with that lender in the future, no matter how low their rates are. A first impression is definitely a lasting one!

• I am a former employee of a major mortgage corporation. I will not name the company, but I will say they had over $5 billion in mortgage loans.

  I received a telephone call one day by a very upset customer. He had just been turned down for a car loan and wanted to know why.

  This particular customer had a $750+ per month mortgage payment. Due to a computer error during an escrow analysis, it was determined that his monthly payment needed to increase by around $1 million per month. Another error prevented the escrow change letter from being sent and the customer was never notified. His credit report showed he owed about $3 million in back payments and our collections department was looking for him also. Luckily, the customer had a good sense of humor and we were able to get everything corrected quickly.

• Back in the 1980s, when interest rates were near the 18 percent mark, we purchased a new home in Houston through Pumpkin Mortgage Co. based in Denver. About six months later, the market completely collapsed and the house dropped in value by 40 percent with rates falling under 10 percent. It was impossible to refinance and everyone in the neighborhood began [leaving] their houses except us. We felt obligated to our commitment and tried everything. People were moving in across the street in larger houses and were paying one-third of what we were paying.

  Finally, I called Pumpkin Mortgage one day in November and desperately pleaded my case. The representative said that "if I had been delinquent on my account as of May, they would have refinanced my house for me." I could not believe it. I was being punished for living up to my commitments and never missing a payment. She later recanted her remarks.

• I worked for the bank that made our original mortgage on our house 17 years ago. They moved its servicing to Little Rock and then sold it to Hallow's Eve Bank. You can imagine our dismay when we received a letter from the servicer stating that we had not provided proof of insurance on our house and if we did not do so soon they would purchase a policy for us. We had always had this taken out of our escrow account with the servicer. After checking with our insurance agent, we found that they had been billed for and paid our homeowners insurance 60 days prior to the letter we received.

  (By the way) I also have a car loan through the same bank. When we decided to pay the loan off, they gave us the wrong pay-off amount (you guessed it, it was too low) and we sent a check. This was in January of this year. We never received the title so we started checking into it. We also questioned why we hadn't received the title. We received a letter in the mail stating that we were 90 days past due on the loan. They had also reported us to the credit reporting agencies as being past due. Now, they won't admit they made a mistake ...

• We have a "home improvement loan" with one of those well-known companies you see on TV that has an athlete for a representative. Well, the state (agency) is widening the road in front of our house and both our primary mortgage companies and this home improvement loan company had to issue "partial releases" for this little itty, bitty corner of our property.

  Our primary mortgage company said, "no problem." But the home improvement loan company started making all kinds of huge demands -- pay a fee for this, we want the title written like this, etc. Most of these demands were not even feasible to do. I tried to work it out between this home improvement loan company and the lawyers representing the state. However, the home improvement loan company wouldn't budge.

  So, last week the state (with our blessing) filed a lawsuit to condemn this little itty-bitty piece of our property (which they can do). The result -- in a few weeks, the state will get the rights to the property, we will get our $11,000+ dollars, and that home improvement loan company will get NOTHING, except a bad reference from me.

  Please just sign us ... condemned and rich in Georgia!

• The bank that holds my rental property mortgage did not receive my monthly check. It was lost in the mail. They wrote me at my old address to advise. The new homeowner did not forward the bank's letter. The bank, instead of calling me at the telephone number on my checks or writing me at the address on my checks, continued to apply my monthly payments to the previous month's due amount for nine months. This showed me being late with nine monthly payments.

  Four credit reporting agencies were notified. This caused problems with re-financing the jumbo mortgage on my primary residence. I informed the bank of the situation and they agreed to send a correction letter to the credit reporting companies. However, the most important one, Gloomy, did not receive the correcting letter because my bank told me later, "Oh, we don't use them anymore!"

  This is a typical example of what happens when banks take the "personal" out of personal banking. Wouldn't it have been nice if someone at the bank had said "Hey, wait a minute, this guy has never been late before in the 15 years he's had this mortgage, let's give him a call to see if everything's OK." Or, "Hey, maybe the check went astray in the mail, let's check with our customer before we hang him out to dry!!"

  You can guess what I'm going to tell them the next time they want to offer me any of their "services!"

• I "locked" into a 6.25 percent 30-year rate last Monday. I spoke to my mortgage broker on Wednesday and Thursday to make sure everything was okay. "No problem" was the reply. On Friday afternoon I was told that the "bank has no record of the lock-in and the rate is now 7 percent." I just don't know what to do now, this is a real nightmare, and since it is so recent I hardly feel like laughing about it.