Author Topic: Should I pay off my mortgage as an act of revenge???  (Read 2756 times)

dancemosaic

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Should I pay off my mortgage as an act of revenge???
« on: February 13, 2020, 09:52:17 PM »
Hi! Iíve been a lurker for years and years, and posted one time about a friend whose life was a financial shit show (still is). Now, Iím posting for myself, seeking wisdom and maybe a slap in the face (NOT a face punch) to calm my rising panic and pissed-offedness. Hereís the situation:

I owe ~$106K on my mortgage with Shellpoint, which is the embodiment of corporate incompetence. After a 30 minute wait on hold tonight, a rep tried to tell me that padding my escrow account by writing a check for a shortage was ďagainst the lawĒ and that I HAD to pay an increase of ~$260 per month. My mortgage is scheduled to go from $1022 to $1283 on March 1st.

This is the second time Iíve wanted to choke the customer service rep; three months ago, I called to ask them to pay a local tax bill of $1000 from my escrow account (abatement has expired and I owed the prorated difference). I followed up with FIVE emails, but the payment was never made - I received a notice of tax sale and had to pay the bill myself directly to the city to avoid losing my apartment. The reason Shellpoint gave me for not making the payment? I attached .jpgís of the tax bill to my emails but they only accept .pdfís. What the actual f*@$??? Why wouldnít someone just email me back to ask for the format they wanted? Why just ignore me???

I didnít choose Shellpoint; my loan was transferred from Ditech (now out of business I think).

Here are my savings balances:

Roth: $96K
403b + 457(b): $325K (both at TIAA-CREF)
Taxable: $65K
HSA: $4K

I can pull the mortgage balance from the taxable and the rest from the Roth. If I did this, Iíd be able to replenish the investment accounts through cash flow at a rate of $2100/month, while still also maxing out the Roth and the tax-deferred accounts. I have no other debt besides the mortgage. Iím 50, earn $130K/year plus I have a side hustle of ~$2100/month which I would also plow back into investments. Iíd like to retire no earlier than 59.5 Iím single with no children.

Here are my questions:

1) What are the tax implications of liquidating the $65K taxable account? Will I end up with a huge tax bill? Everything in all my accounts is in index funds (S&P 500)

2) I know the benefits of not paying off the mortgage. But, is there a risk to KEEPING the mortgage with a company that has hundreds if not thousands of complaints and consumer lawsuit? (I Googled Shellpoint while I was on hold...)

3) Is there any possibility that the rep was right?? I have owned many properties since I was 23; is there a new law regarding how escrow accounts are funded that I donít know about?

Without the mortgage payment, my monthly expenses, all-in, would be $2400, including $700 I give to my Dad to supplement his pension and SS. I have simple tastes, and I like to live a simple, peaceful, stress-free life, and dealing with Shellpoint is the antithesis of what I want.

What I DO want is revenge on that rep for her pissy attitude. When I couldnít convince her that it is not against the law (as far as I know) for me contribute to my own escrow account,  I said in frustration and exasperation, ďYou know what? I think Iím just going to pay off this mortgage so I donít have to deal with you people!Ē She replied, ďYeah, good luck with thatĒ with so much snark and incredulity at the idea that I wanted to smack her on the nose with the payoff quote I also printed out while I was waiting on hold...

Thanks in advance for letting me vent, and for what I know will be valuable guidance.





MilesTeg

  • Handlebar Stache
  • *****
  • Posts: 1025
Re: Should I pay off my mortgage as an act of revenge???
« Reply #1 on: February 13, 2020, 10:00:08 PM »
Hi! Iíve been a lurker for years and years, and posted one time about a friend whose life was a financial shit show (still is). Now, Iím posting for myself, seeking wisdom and maybe a slap in the face (NOT a face punch) to calm my rising panic and pissed-offedness. Hereís the situation:

I owe ~$106K on my mortgage with Shellpoint, which is the embodiment of corporate incompetence. After a 30 minute wait on hold tonight, a rep tried to tell me that padding my escrow account by writing a check for a shortage was ďagainst the lawĒ and that I HAD to pay an increase of ~$260 per month. My mortgage is scheduled to go from $1022 to $1283 on March 1st.

This is the second time Iíve wanted to choke the customer service rep; three months ago, I called to ask them to pay a local tax bill of $1000 from my escrow account (abatement has expired and I owed the prorated difference). I followed up with FIVE emails, but the payment was never made - I received a notice of tax sale and had to pay the bill myself directly to the city to avoid losing my apartment. The reason Shellpoint gave me for not making the payment? I attached .jpgís of the tax bill to my emails but they only accept .pdfís. What the actual f*@$??? Why wouldnít someone just email me back to ask for the format they wanted? Why just ignore me???

I didnít choose Shellpoint; my loan was transferred from Ditech (now out of business I think).

Here are my savings balances:

Roth: $96K
403b + 457(b): $325K (both at TIAA-CREF)
Taxable: $65K
HSA: $4K

I can pull the mortgage balance from the taxable and the rest from the Roth. If I did this, Iíd be able to replenish the investment accounts through cash flow at a rate of $2100/month, while still also maxing out the Roth and the tax-deferred accounts. I have no other debt besides the mortgage. Iím 50, earn $130K/year plus I have a side hustle of ~$2100/month which I would also plow back into investments. Iíd like to retire no earlier than 59.5 Iím single with no children.

Here are my questions:

1) What are the tax implications of liquidating the $65K taxable account? Will I end up with a huge tax bill? Everything in all my accounts is in index funds (S&P 500)

2) I know the benefits of not paying off the mortgage. But, is there a risk to KEEPING the mortgage with a company that has hundreds if not thousands of complaints and consumer lawsuit? (I Googled Shellpoint while I was on hold...)

3) Is there any possibility that the rep was right?? I have owned many properties since I was 23; is there a new law regarding how escrow accounts are funded that I donít know about?

Without the mortgage payment, my monthly expenses, all-in, would be $2400, including $700 I give to my Dad to supplement his pension and SS. I have simple tastes, and I like to live a simple, peaceful, stress-free life, and dealing with Shellpoint is the antithesis of what I want.

What I DO want is revenge on that rep for her pissy attitude. When I couldnít convince her that it is not against the law (as far as I know) for me contribute to my own escrow account,  I said in frustration and exasperation, ďYou know what? I think Iím just going to pay off this mortgage so I donít have to deal with you people!Ē She replied, ďYeah, good luck with thatĒ with so much snark and incredulity at the idea that I wanted to smack her on the nose with the payoff quote I also printed out while I was waiting on hold...

Thanks in advance for letting me vent, and for what I know will be valuable guidance.

If it bothers you that much, refinance. That will be a lot cheaper than all the tax liability you will rack up.

Tuskalusa

  • Bristles
  • ***
  • Posts: 442
Re: Should I pay off my mortgage as an act of revenge???
« Reply #2 on: February 13, 2020, 10:03:34 PM »
That is totally frustrating, and I can see why you want to just make it go away.

Another way to make it go away would be to refi out of that nutball bank, and to remove the escrow account on the new loan.

It it were me, Iíd be tempted to pay off, but Iíd also realize the I love having a pile of cash lying around more.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 12065
  • Age: 62
  • Location: NorCal
Re: Should I pay off my mortgage as an act of revenge???
« Reply #3 on: February 13, 2020, 10:32:31 PM »
Sorry dude, your balances aren't amazing for your age. Do you know the expression "Cut off your nose to spite your face?" That's exactly what you'd be doing, and that stupid twit won't give even one shit that you did what she thought impossible. Who cares what she thinks? Who gives even one fuck? Hint: Not you.

Re-fi your house. Rates are crazy low again right now. Look for a local lender or credit union who won't sell your loan or give you bullshit answers.

I'd recommend a new 30 year fixed loan. Get that payment down and start stuffing your retirement accounts with cash asap. Unless you have some other pot of money you haven't mentioned, you are behind the eight ball. You can always pay the mortgage off later, but right now you need to get the magic of compound interest working in your favor.

Feel free to come check out this thread:

https://forum.mrmoneymustache.com/throw-down-the-gauntlet/dont-payoff-your-mortgage-club/

Maenad

  • Pencil Stache
  • ****
  • Posts: 608
  • Location: Minneapolis 'burbs
Re: Should I pay off my mortgage as an act of revenge???
« Reply #4 on: February 14, 2020, 06:18:25 AM »
+1 to the refinancing. This is a business arrangement, emotions and desire for revenge are useless. They obviously don't care about your good will, and won't give a damn about your anger. Refinance somewhere with low rates and good customer service, and stop thinking about these losers. Taking business away from them is the only thing that could possibly get them to change, long term. But you won't get them to change, so just absent yourself from the equation.

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5183
Re: Should I pay off my mortgage as an act of revenge???
« Reply #5 on: February 14, 2020, 06:35:01 AM »
Newsflash: The servicer does not own the mortgage.  Someone else does.  The fact that you got stuck with one of the crap servicers is the fault of whoever Ditech sold the loan to.  The only loss these people will experience is the loss of the servicing fees on one loan.  On the other hand, you will suffer significant financial damage if you pay off the loan today.

What are the rate and terms for this loan?  How is your credit?  If you can lower the rate on a no or very low cost refinance, I would start that process today.

There are a lot of bad servicing companies out there.  The bad ones are generally the ones that get the non-conforming and high risk loans.  Perhaps Ditech gave you a non-conforming loan or considered you high risk for some reason.  At this point, just refinance with a reputable lender and be done with these folks.

Aunt Petunia

  • Handlebar Stache
  • *****
  • Posts: 1086
Re: Should I pay off my mortgage as an act of revenge???
« Reply #6 on: February 14, 2020, 06:56:39 AM »
I refinanced my old house with a first lien home equity from a credit union. The benefit was that there were no closing costs, no appraisal, and no escrow account. The fee was $200 total. All I had to do was fill out an application. I opted for a ten year note since i didn't owe that much.

merince

  • 5 O'Clock Shadow
  • *
  • Posts: 29
Re: Should I pay off my mortgage as an act of revenge???
« Reply #7 on: February 14, 2020, 06:59:59 AM »
Refi, make sure the amount is less than 80% of the value so that your taxes and insurance aren't escrowed and pay those yourself.

FatFI2025

  • Bristles
  • ***
  • Posts: 267
  • Location: California
Re: Should I pay off my mortgage as an act of revenge???
« Reply #8 on: February 14, 2020, 07:14:45 AM »
I'll join the others in voting for a refi with a bank/credit union that keeps their loans in house.

In general, I expect that corporations (and the people in them) will be incompetent. So when this stuff happens I just make the most rational decisions at the time and try to move on. Sometimes I even let a small amount of $ go in the process.

I had the exact same situation with Well Fargo mortgage and had to pay a late fee on my property tax. I paid the bill and tried to get WFHM to cough up the late fee, but in the end it wasn't worth my time to spend hours fighting for $50.

Fishindude

  • Handlebar Stache
  • *****
  • Posts: 2279
Re: Should I pay off my mortgage as an act of revenge???
« Reply #9 on: February 14, 2020, 07:43:01 AM »
I'd refinance with someplace local where you can walk in to a building and speak to a human.

wellactually

  • Stubble
  • **
  • Posts: 131
Re: Should I pay off my mortgage as an act of revenge???
« Reply #10 on: February 14, 2020, 08:18:56 AM »
Just asked my husband who, strangely enough, audits mortgage servicers as part of his job. He said that escrow balances are regulated in a number of ways, but it varies by state.

But overall, he said they are only allowed to keep up to a certain percentage of your yearly escrow payments as a cushion. So it likely is not allowed for them to just accept a check to pad your escrow account. Why are you so opposed to having that increase added to your payment instead of paying a lump sum and letting them sit on your money?

He also said if you ever want a complete answer with referenced laws, you should put your request in writing to the servicing company. And if you want them to pay that specific local tax bill, then you will have to get confirmation from them that they'll start escrowing for it and then they will adjust your payment amount. You can't just call the servicer and get them to cut a check. That's pretty standard.

I get it though. I'm in a multi-week battle right now with a furniture retailer over a child's dresser. I get very frustrated when service providers are unclear or say one thing and do another. And mortgage servicers in general have issues (thus why my husband has a job!). I agree with others that a refi might be the best option if you really want to avoid this company.

Malum Prohibitum

  • Pencil Stache
  • ****
  • Posts: 720
Re: Should I pay off my mortgage as an act of revenge???
« Reply #11 on: February 14, 2020, 10:05:16 AM »
Years ago, here is what I did in your situation.


I paid the taxes well ahead of time and notified the mortgage company that the taxes were paid in full, so DO NOT PAY.  I then paid the insurance in full and notified them as well. 

I think I remember dimly some conversation with a representative questioning why I would do this when I had an escrow account.  I basically said I did not want to escrow anymore.  She tried to tell me what a benefit it was, but, in the end, they cancelled the escrow account, refunded all the money, and I have never escrowed with a mortgage since then.  I just pay the tax and insurance in full when due.

Just a thought, and much easier to accomplish than paying off the mortgage by draining your meager retirement account.

iluvzbeach

  • Bristles
  • ***
  • Posts: 321
Re: Should I pay off my mortgage as an act of revenge???
« Reply #12 on: February 14, 2020, 10:39:32 AM »
I am a big fan of having a paid off mortgage, especially for purposes of reducing income needs in retirement (important if planning to use ACA and wanting to keep premiums low.) That said, I agree with what some others have posted and, frankly, your first priority right now needs to be padding your stash. Youíll need quite a bit more before you can retire and I donít recommend raiding your Roth IRA to perform the payoff.

In your situation, Iíd do one of two things: 1) submit a written request to remove the escrow requirement from your current mortgage, or 2) re-finance with a local financial institution thatís a portfolio lender vs. one that sells loans on the secondary market and make sure the mortgage does not include an escrow provision.

Iíd then work to continue building up your stash and aim to payoff the mortgage just before retiring.

Donít let the idiocy of the current situation lead you to do something that could have negative financial consequences to you down the line.

big_owl

  • Pencil Stache
  • ****
  • Posts: 751
Re: Should I pay off my mortgage as an act of revenge???
« Reply #13 on: February 14, 2020, 12:25:21 PM »
I wouldn't liquidate any accounts or even refinance, I would just pay ahead on the mortgage to pay it off earlier. 

dougules

  • Handlebar Stache
  • *****
  • Posts: 1926
Re: Should I pay off my mortgage as an act of revenge???
« Reply #14 on: February 14, 2020, 12:36:10 PM »
Maybe I missed it, but what is your current interest rate?

SugarMagnolia77

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Re: Should I pay off my mortgage as an act of revenge???
« Reply #15 on: February 14, 2020, 12:43:58 PM »
None of the actions will have any effect on the customer service rep. Let that interaction go. It probably isn't taking up any of her headspace, so there's no point in stewing over it.

All these comments about refi make sense. You have issues with the company overall and that's your most appropriate route out. Your investments are cooking and yanking a chunk off the fire with the market the way it is might not be the best idea.

JSMustachian

  • Stubble
  • **
  • Posts: 136
Re: Should I pay off my mortgage as an act of revenge???
« Reply #16 on: February 14, 2020, 03:17:43 PM »
See if your loan provider will allow you to drop the escrow once you reach 20% equity.

dancemosaic

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: Should I pay off my mortgage as an act of revenge???
« Reply #17 on: February 15, 2020, 07:33:30 AM »
OK!!!

Yesterday, I called Quicken/Rocket mortgage, explained my situation and asked to refinance WITHOUT an escrow account. I was approved!

The old terms of the mortgage were 3.99% fixed, 30 year. These are the same as the new terms.
The closings costs were estimated at ~$4500, and my monthly payment would be $508/month, down from $1283/month that Shellpoint was requiring, including that ridiculously padded escrow account.

I uploaded a years worth of bank statements, 2 months of statements from Fidelity (to prove that I had the funds to close), pay stubs and my 2019 W-2, all while I was on the phone with the rep. She was really surprised at how financially organized I was, and it occurred to me that this, like being able to pay off a mortgage, is so unusual as to warrant comment/snark (she wasnít snarky, just like, ďWow!Ē)

Iím not a member of a credit union so I donít know if I can do better with my closing costs. Even if I canít, I feel better knowing that 1) Iím almost done with that sub-prime servicer (I had a chap. 7 in 2012 as the result of some disastrous financial decisions my ex-husband made); 2) Quicken will not sell the loan 3) I can manage my own tax and insurance payments. I didnít even know that was a thing, and Iíve been a homeowner since I was 23 years old!

Is there any thing else Iím missing? I am so grateful for this advice, and I want to make myself (and the Mustachian community) proud of how Iím dealing with my money.

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1381
  • Location: The Buckeye State
Re: Should I pay off my mortgage as an act of revenge???
« Reply #18 on: February 15, 2020, 07:44:21 AM »
OK!!!

Yesterday, I called Quicken/Rocket mortgage, explained my situation and asked to refinance WITHOUT an escrow account. I was approved!

The old terms of the mortgage were 3.99% fixed, 30 year. These are the same as the new terms.
The closings costs were estimated at ~$4500, and my monthly payment would be $508/month, down from $1283/month that Shellpoint was requiring, including that ridiculously padded escrow account.

I uploaded a years worth of bank statements, 2 months of statements from Fidelity (to prove that I had the funds to close), pay stubs and my 2019 W-2, all while I was on the phone with the rep. She was really surprised at how financially organized I was, and it occurred to me that this, like being able to pay off a mortgage, is so unusual as to warrant comment/snark (she wasnít snarky, just like, ďWow!Ē)

Iím not a member of a credit union so I donít know if I can do better with my closing costs. Even if I canít, I feel better knowing that 1) Iím almost done with that sub-prime servicer (I had a chap. 7 in 2012 as the result of some disastrous financial decisions my ex-husband made); 2) Quicken will not sell the loan 3) I can manage my own tax and insurance payments. I didnít even know that was a thing, and Iíve been a homeowner since I was 23 years old!

Is there any thing else Iím missing? I am so grateful for this advice, and I want to make myself (and the Mustachian community) proud of how Iím dealing with my money.

This sounds like a good bet, but only if you start taking the difference between your old mortgage payment and your new mortgage payment into a tax-advantaged account (401k, Roth, etc.).

dancemosaic

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: Should I pay off my mortgage as an act of revenge???
« Reply #19 on: February 15, 2020, 07:49:36 AM »
I already max out a Roth, HSA, 403b and 457b, so I donít have any more tax-advantaged space. My plan is to plough the difference into my investment accounts which are exclusively index funds (no bonds since I know I have catching up to do in my savings).

Dicey

  • Senior Mustachian
  • ********
  • Posts: 12065
  • Age: 62
  • Location: NorCal
Re: Should I pay off my mortgage as an act of revenge???
« Reply #20 on: February 15, 2020, 08:50:47 AM »
Most credit unions will figure out a way let you join if you have a pulse. You might try a local bank as well Your filing was over seven years ago and you have a lot of equity now. You should be able to knock at least a half point off your current rate. I applaud you for taking action, but your future self will thank you for getting more quotes. And $4500 in closing costs to get that interest rate is steep.

Good for you for taking positive steps!

Aunt Petunia

  • Handlebar Stache
  • *****
  • Posts: 1086
Re: Should I pay off my mortgage as an act of revenge???
« Reply #21 on: February 15, 2020, 08:58:01 AM »
Your balance is not that high, maybe you could get a lower rate with a 15 year.

ender

  • Walrus Stache
  • *******
  • Posts: 5301
Re: Should I pay off my mortgage as an act of revenge???
« Reply #22 on: February 15, 2020, 09:00:21 AM »
I'd check a few different lenders, $4.5k is a lot for closing costs.

SugarMagnolia77

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Re: Should I pay off my mortgage as an act of revenge???
« Reply #23 on: February 15, 2020, 09:19:11 AM »
I'd check a few different lenders, $4.5k is a lot for closing costs.

That was my first thought. Do some checking locally, OP!

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5183
Re: Should I pay off my mortgage as an act of revenge???
« Reply #24 on: February 15, 2020, 01:38:18 PM »
OK!!!

Yesterday, I called Quicken/Rocket mortgage, explained my situation and asked to refinance WITHOUT an escrow account. I was approved!

The old terms of the mortgage were 3.99% fixed, 30 year. These are the same as the new terms.
The closings costs were estimated at ~$4500, and my monthly payment would be $508/month, down from $1283/month that Shellpoint was requiring, including that ridiculously padded escrow account.

I uploaded a years worth of bank statements, 2 months of statements from Fidelity (to prove that I had the funds to close), pay stubs and my 2019 W-2, all while I was on the phone with the rep. She was really surprised at how financially organized I was, and it occurred to me that this, like being able to pay off a mortgage, is so unusual as to warrant comment/snark (she wasnít snarky, just like, ďWow!Ē)

Iím not a member of a credit union so I donít know if I can do better with my closing costs. Even if I canít, I feel better knowing that 1) Iím almost done with that sub-prime servicer (I had a chap. 7 in 2012 as the result of some disastrous financial decisions my ex-husband made); 2) Quicken will not sell the loan 3) I can manage my own tax and insurance payments. I didnít even know that was a thing, and Iíve been a homeowner since I was 23 years old!

Is there any thing else Iím missing? I am so grateful for this advice, and I want to make myself (and the Mustachian community) proud of how Iím dealing with my money.

If your credit has improved, you need to shop this loan.  The rate and fees are too high.  Quicken is not cheap and some of their mortgage people are slimy.  You should be able to get down to around 3.5 percent for a 30 year mortgage right now with no points, if you shop.  As long as you get all your quotes within 30 days, mortgage credit pulls all count as one inquiry.  For a benchmark, get an online quote from Aimloan.com.

TomTX

  • Magnum Stache
  • ******
  • Posts: 3997
  • Location: Texas
Re: Should I pay off my mortgage as an act of revenge???
« Reply #25 on: February 15, 2020, 02:21:41 PM »
Shop that loan.

I did a cashout refi to a new 30 year loan here in Texas - and cashout is always a worse rate here due to the big hassles the State put into place.

Anyway - local credit union got me 3.95%, closing costs were under $100, no escrow, they keep the loan in-house. If I ever have an issue, I can walk into any local branch and talk to a human.

iluvzbeach

  • Bristles
  • ***
  • Posts: 321
Re: Should I pay off my mortgage as an act of revenge???
« Reply #26 on: February 15, 2020, 03:07:52 PM »
Congrats on the steps youíve taken thus far. As others have said, youíre on the right track but you can definitely get a better rate and closing costs that are much closer to $0. Donít even worry about the bankruptcy from 2012, a lot of people were in that exact spot in 2012 as they worked to recover from the recession. Depending on where you live, 3.5% with minimal closing costs and no escrow should be attainable.

lhamo

  • Stubble
  • **
  • Posts: 135
  • Location: Seattle
Re: Should I pay off my mortgage as an act of revenge???
« Reply #27 on: February 15, 2020, 05:44:54 PM »
Why are you happy about paying $4500 in closing costs for the same terms you currently have, less the escrow (which ultimately would cover your taxes as well, with a refund of any overcharge)?  Agree that you should shop for better rates/terms.

dancemosaic

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: Should I pay off my mortgage as an act of revenge???
« Reply #28 on: February 16, 2020, 10:55:54 AM »
So, I went to Aimloan.com (thank you, Anotherreader for the reference!) and compared their numbers against those from Quicken. I realized that I incorrectly reported the amount Quicken said I would need to close; here are the actual figures:

Quicken: 3.99%, 30 year, no escrow, $5247 cash-to-close (not $4500)
Aimloan: 3.875%, 30 year, no escrow, $3767 cash-to-close
Difference in cash-to-close: $1480

My credit score ranges from 720 to 730. I'm wondering if the super-low cash-to-close figures that others have listed here are because their credit scores are much higher than mine? I used to have a credit score of 810, but after the Chap. 7 in 2012, it plunged to 620; it's taken me since then to rebound to where I am now. If that's not the issue, what other factors could be contributing to the significantly higher loan estimates I've received?

Aimloan will transfer the loan, Quicken will service it - does this affect my bottom line, which is to have control over my taxes/insurance payments and to create an increase in cash-flow to funnel to my investment accounts?

FYI, I reached out to my employer to see if we are affiliated with a credit union, but unfortunately, we are not. Also, this morning I sent an email to my Quicken rep to cancel my Intent to Proceed, since it seems that even if I can't get a super-low cash-to-close, I can do better than what they were offering. I asked them NOT to charge the $500 deposit to my credit card for the appraisal and credit report.

Anything else I need to do??


Telecaster

  • Handlebar Stache
  • *****
  • Posts: 2202
  • Location: Seattle, WA
Re: Should I pay off my mortgage as an act of revenge???
« Reply #29 on: February 16, 2020, 11:25:48 AM »
FYI, I reached out to my employer to see if we are affiliated with a credit union, but unfortunately, we are not. Also, this morning I sent an email to my Quicken rep to cancel my Intent to Proceed, since it seems that even if I can't get a super-low cash-to-close, I can do better than what they were offering. I asked them NOT to charge the $500 deposit to my credit card for the appraisal and credit report.

Anything else I need to do??

There is probably a local credit union you can join, if not there are several online:

https://www.thebalance.com/credit-unions-you-can-join-online-4151929

Remember, the best revenge is living well.

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5183
Re: Should I pay off my mortgage as an act of revenge???
« Reply #30 on: February 16, 2020, 11:40:24 AM »
Did you input your credit score at Aimloan?  You need at least a 760 score to obtain the best rates.  If the credit score you used was not accurate, you need to correct that.  Use the score your Quicken representative gave you.  If you did not get that information, call the rep and get the score they are using for your application.

The bankruptcy was in 2012.  It should have disappeared from your credit report.  If it has, you might be able to increase your score over a couple of months by reducing any balances to a lower percentage of available credit and increasing the number of months of on-time payments.  Getting the score over 760 is key to the best mortgage rate.

Some credit unions have good rates, some do not.  Before you do a lot of research, look at the credit score.  If it really is 710 or 720, it might be better to wait out the time needed to get it to the magic 760 score.

lhamo

  • Stubble
  • **
  • Posts: 135
  • Location: Seattle
Re: Should I pay off my mortgage as an act of revenge???
« Reply #31 on: February 16, 2020, 11:47:32 AM »
I still don't understand why you are choosing to pay 3-6k in closing costs for a new loan that does basically nothing but remove the escrow requirement.  OK, I get that you are frustrated with their customer service and the fact that they messed up the one-time increased tax payment.  But presumably that is sorted now.  Or you could get the same result by paying the taxes yourself to ensure they are paid on time and then the extra amount in escrow would just be refunded to you later.  Is it annoying to have that  money tied up unnecessarily?  Sure.  It would take a LONG time of having and extra $200/month in cash flow to invest to make up $3-6k in unnecessary closing fees.

It is a bit curious to me that so many people are offering you advice about HOW to refinance without asking why on earth you would do so in this situation.  Your mortgage is only 100k.  You are quoting rates that are virtually identical to your current mortgage with very high closing fees.  Can't understand why people are urging you to spend this money in this situation.

wellactually

  • Stubble
  • **
  • Posts: 131
Re: Should I pay off my mortgage as an act of revenge???
« Reply #32 on: February 16, 2020, 12:21:34 PM »
It never sounded like the servicer messed up not paying a bill. It sounded like you wanted them to pay an extra local tax that was not originally escrowed. Then they actually messed up by saying you just had to send them pictures but not responding to correct you that what you sent was insufficient (needed pdf).

Now, it sounds like you are paying points to get the rates youíre quoted. Check and see what is included in those closing cost estimates. With your credit score, they might be assessing pricing adjustments to try and get the rate more attractive. But you already have that rate.

I donít think you are going to solve anything by refinancing. Maybe your action out of spite should be to learn about exactly what the escrow regulations are and hold them accountable in writing if there are any hiccups in the future.

But mostly, if they were actually at fault for not paying a tax bill that was setup to escrow, you could get them to pay any penalties. They donít just pay tax bills for you if they werenít set up for it. Now that you want them to pay that bill, they are going to charge you more throughout the year. One bad customer service rep does not mean they are really at fault.

ixtap

  • Handlebar Stache
  • *****
  • Posts: 1899
Re: Should I pay off my mortgage as an act of revenge???
« Reply #33 on: February 16, 2020, 12:33:49 PM »
Have you looked into getting escrow removed by reducing your balance, rather than completely paying it off.

dancemosaic

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: Should I pay off my mortgage as an act of revenge???
« Reply #34 on: February 16, 2020, 12:51:37 PM »
I have 3 main goals: 1) To NOT have my mortgage payment increase by $260/month, all which would be diverted to an over-inflated escrow account; 2) to eliminate the escrow account entirely, to prevent Shellpoint from mismanaging it; 3) to NOT have Shellpoint as my mortgage servicer at all (I just donít have the patience for their brand of ďcustomer serviceĒ). If there is a way for me to do any of this without refinancing, please tell me.

The closing costs DO seem high to me, but I was thinking of them as the ďprice of ĎoutíĒ, given everything. Yet, I also realize that I was being impulsive with Quicken, which is why I canceled the Intent to Proceed.

I received a quote from Aimloan (see previous post) and one from Better.com is in progress - they asked me to explain the BK, and to upload a copy of my discharge, which I did. They also reported my credit score as 742. I expected the BK to stay on my report for 10 years, until 2022 - is this incorrect?

Paying the taxes myself then requesting a refund from Shellpoint feels like a huge bureaucratic risk to me, given the pages upon pages of complaints from customers about such requests being stonewalled or ignored altogether... If it were a more reputable company, I would do this but in this case, that wonít work for me.

Have you looked into getting escrow removed by reducing your balance, rather than completely paying it off.

How does this work? FYI, my loan balance is ~$106K, and the value of the apartment is ~$254K.
« Last Edit: February 16, 2020, 01:02:53 PM by dancemosaic »

ixtap

  • Handlebar Stache
  • *****
  • Posts: 1899
Re: Should I pay off my mortgage as an act of revenge???
« Reply #35 on: February 16, 2020, 12:54:24 PM »
Escrow is usually only required by the PMI underwriter. In many cases, if owe less than 80%, you are not required to have PMI not escrow. Depends on the terms of your loan, though.

Villanelle

  • Magnum Stache
  • ******
  • Posts: 3448
Re: Should I pay off my mortgage as an act of revenge???
« Reply #36 on: February 16, 2020, 01:03:10 PM »
I was going to suggest you just stop escrowing, since it seems like that is the source of your issues.  Have you asked your current lender if you can do that? Our lender allowed it when we bought our home. They asked if we wanted to escrow, we said no thank you, and that was the end of it.   (May have been related to how much we put down; I don't know.)

And paying thousands of dollars not to escrow is crazy.  Financially, you might be better off just paying our own taxes and letting the escrowed funds you already have just sit.  I'm not sure why you couldn't do that if you wanted to.

Or shop the refi to find one with better terms.

lhamo

  • Stubble
  • **
  • Posts: 135
  • Location: Seattle
Re: Should I pay off my mortgage as an act of revenge???
« Reply #37 on: February 16, 2020, 01:58:11 PM »
Can you clarify:

1)  How much money is currently in the escrow account and

2) What the new annual property taxes are going to be now that the abatement has expired (+ any increases due to new levies, etc), and how much does that compare to what you were paying before.

You stated earlier that the pro-rated amount of the new taxes was $1000 -- if that was only for half the year, or even 3/4 of the year, then the servicer increasing the new monthly amount by $260 doesn't seem out of line, unless you already have a huge balance in there that would cover any increase in the taxes.

I mean, if you can find a no-cost way to move the mortgage and guarantee this company won't be the servicer in the future, then by all means do so.  But don't spend a ridiculous amount on a refi just because you are mad at a customer service agent.

dancemosaic

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: Should I pay off my mortgage as an act of revenge???
« Reply #38 on: February 16, 2020, 02:14:57 PM »
OK!!!

So, I just wrote to Shellpoint through their website portal requesting that my escrow account be dropped, given that my equity is greater than 20% and my loan is conventional, which is what is required under federal guidelines. I'll follow up by phone on Tuesday (since tomorrow is a banking holiday). To ixtap's point, here's the law, which is new information to me and maybe other people:

https://www.law.cornell.edu/uscode/text/15/1639d

Duration of mandatory escrow or impound account: An escrow or impound account established pursuant to subsection (b) shall remain in existence for a minimum period of 5 years, beginning with the date of the consummation of the loan, unless and untiló
(1) such borrower has sufficient equity in the dwelling securing the consumer credit transaction so as to no longer be required to maintain private mortgage insurance;
(2) such borrower is delinquent;
(3) such borrower otherwise has not complied with the legal obligation, as established by rule; or
(4) the underlying mortgage establishing the account is terminated.

The current escrow balance is $1155; the new taxes will be ~$6000/yr (I'm calling the tax office on Tuesday to get a precise number). The prorated amount of $~$1000 was from August through the end of 2019.

I don't know if $260/month increase is so out of line; I think it was the rep's inability to answer my questions about it that infuriated me. The issue wasn't that the $260 was too high; I wanted to know why, exactly, I couldn't keep my mortgage payment the same and pay the difference to my escrow account on my own, and she kept saying that it was "against the law", which just didn't sound right to me.

As a side note, I wrote to Ditech a few years ago (when they still had my loan) asking to drop PMI when my apartment's appraisal indicated that I had more than $100K in equity (today, it's worth ~$254K). Ditech said yes, but never mentioned that I could also drop the escrow account. And when I was having that argument with the Shellpoint rep a few days ago, she also never told me that I could drop it. Is there some financial incentive for mortgage companies to maintain control over escrow accounts?

Anyway, Villanelle, thank you for this suggestion; I hope it's that simple! If so, I'd still have to deal with Shellpoint as the loan servicer but they'd only have to auto-debit the P&I every month - how hard could that be?? (#eyeroll #famouslastwords)

Fingers crossed, and thank you to everyone who chimed in to help - you are very much appreciated!!!

wellactually

  • Stubble
  • **
  • Posts: 131
Re: Should I pay off my mortgage as an act of revenge???
« Reply #39 on: February 16, 2020, 03:41:47 PM »
I've said it before, I'll say it again:

they are only allowed to keep up to a certain percentage of your yearly escrow payments as a cushion. So it likely is not allowed for them to just accept a check to pad your escrow account. Why are you so opposed to having that increase added to your payment instead of paying a lump sum and letting them sit on your money?

If you want to know the exact law or regulation, you can send a written request and they have to respond to you citing that. But it likely is not allowed and that is why you cannot just write a check to pad your account.

There is no financial incentive specifically for a servicing company to manage an escrow account. They have a financial incentive for you not to have additional liens taken out due to tax delinquency and then fall behind on payments, yadda yadda yadda. It's not their job to teach you about how escrow works.

Telecaster

  • Handlebar Stache
  • *****
  • Posts: 2202
  • Location: Seattle, WA
Re: Should I pay off my mortgage as an act of revenge???
« Reply #40 on: February 16, 2020, 06:47:56 PM »
I don't know if $260/month increase is so out of line; I think it was the rep's inability to answer my questions about it that infuriated me. The issue wasn't that the $260 was too high; I wanted to know why, exactly, I couldn't keep my mortgage payment the same and pay the difference to my escrow account on my own, and she kept saying that it was "against the law", which just didn't sound right to me.

As a side note, I wrote to Ditech a few years ago (when they still had my loan) asking to drop PMI when my apartment's appraisal indicated that I had more than $100K in equity (today, it's worth ~$254K). Ditech said yes, but never mentioned that I could also drop the escrow account. And when I was having that argument with the Shellpoint rep a few days ago, she also never told me that I could drop it. Is there some financial incentive for mortgage companies to maintain control over escrow accounts?

They get a fee for managing the escrow.  Some mortgage servicers want the fee and require escrow.  Some don't.

A couple questions:  Typically, if you pay extra on a mortgage, you get the option of paying the difference to interest, principle, or escrow.  Do you NOT have that option?

Even if you don't have that option, is it really worth all the extra work and money to make lump sum payments instead of predictable monthly payments?  You could set this up as autopay and never have to think about it for a year.  Seems like this is a lot of grief for almost no benefit. 




Buffaloski Boris

  • Handlebar Stache
  • *****
  • Posts: 1249
Re: Should I pay off my mortgage as an act of revenge???
« Reply #41 on: February 16, 2020, 07:12:09 PM »
Most credit unions will figure out a way let you join if you have a pulse. You might try a local bank as well Your filing was over seven years ago and you have a lot of equity now. You should be able to knock at least a half point off your current rate. I applaud you for taking action, but your future self will thank you for getting more quotes. And $4500 in closing costs to get that interest rate is steep.

Good for you for taking positive steps!

^^^^^^
Dicey is right! If it were me, Iíd do it through a credit union that has a policy of not selling the servicing.  A little creativity and you can find a way to join a credit union.

Villanelle

  • Magnum Stache
  • ******
  • Posts: 3448
Re: Should I pay off my mortgage as an act of revenge???
« Reply #42 on: February 16, 2020, 08:00:46 PM »
I always assumed the companies like to escrow because they get interest on the money the hold until they pay out out to the tax man.  On a micro level, it's not a ton, but with thousands of accounts, it adds up.

That, in addition to making sure you pay the taxes on a property in which they they have a financial interest.