I think this makes seven or eight, but without driving home and diving into decades-old statements I can only estimate that my little house, my home, has had over a half-dozen mortgage companies/servicers in just under thirteen years. About every other year, they change. The more tortuous period was when I was unable to pay my bills. Ironically, about half of those transfers were bankruptcies. Thanks, but I can’t take the credit for dismantling billion-dollar corporations. Considering what I’ve witnessed, I’m sure their efforts are a larger cause than mine.
Today I tried paying my bill. The middle of the month is coming up and I was anxious to pay before late fees and credit dings hit. Yesterday I tried paying my bill. But this most recent company didn’t brand itself as a mortgage servicer but as a debt collector. They’d only let me pay my bill if I gave them access to my bank account. Considering that the day before I’d received the second notice that my attempts to pay had failed, I was reluctant to give them that level of access. I’ll give them money, but not access to my entire account. I’d only do that with someone I trust, and the way they were conducting their business generated distrust, instead. Not the way to run a business, particularly a financial business that is tied to housing, particularly one that has installed so many barriers to getting paid.
The bill pay service with my bank has worked for all of the other mortgagers. This time, the transfers bounced, but only after several days, delaying my eventual payment. Evidently, it was time to start that process anew. But first, I wanted to pay by phone, authorize a one-time payment, and get it done. I could set up bill pay when I had more time. (Life in real estate on Whidbey Island is rather busy – understatement – currently.) Easy enough, call them up. Except that the phone number on their web site doesn’t work. The phone number they gave to the previous mortgage servicer didn’t work, either. I finally found a phone number on one of those boiler-plate sheets that are easy to ignore. OK. Let’s do this.
Call. Outside working hours, please call back. Call back. Put on hold. Two minutes later, enter phone number, address, account number, date of birth, social security number and account routing number and account number and whoa! Most companies will ask for some of that, then accept a debit card. Getting paid is what business is about. Get transferred out of voicemail by hitting random keys. Two minutes on hold, talk to one person who asks for the same info, express my strong reluctance, get passed to another employee. Get asked the same questions, have the same conversation, get transferred again. Each transfer was supposed to be to someone who could accept a debit card payment. “All agents are currently busy.” My apologies. Did I do that?
Six minutes later, finally a human who acts more human. Have the same questions, discussion, and I finally interrupt the cycle by asking for a mailing address where I can overnight the check. I read off the three addresses they provided on the paperwork. None of them are valid. The phone numbers weren’t right. The addresses weren’t right. The employee, I congratulate on patience, points out that there are another three addresses, one that I’ve forgotten, one for the headquarters, and one for accepting overnight mail. Each of the three are in different states with different corporate names in the address. This is efficient?
If you’ve actually read this tedious chronology, congratulate yourself. Now, imagine how often this is happening. Multiply the experience by potentially millions of homeowners. My call involved four employees. I’m glad they have a job, but how much time and money was wasted shuffling me from one to the other. This one episode cost them a half-hour of pay, directly; and as business owners know, the burden rate from the indirect costs amplify that cost. The employees must be tracked and managed. The episode must be recorded, archived, entered into the database, and maybe analyzed. I doubt there will be a response, but if there is, that will cost them, too.
Mortgage defaults are blamed for many things, but I suspect they aren’t the only cause. Review what happened in my Mesmerizing Mortgage Mediation Meeting. Browse a bit of the circus that is in My Mortgage Modification Chronology. Financial institutions were known for conservative, prudent, and efficient operations. Today’s episodes cemented my doubts about the modern version of such operations.
A few years ago, Last Week Tonight with John Oliver produced a show called Debt Buyers. John Oliver is a comedian, so there was certainly a fun tone to the piece; but it pointed out that every time debt is sold, it is sold at a discount. My original mortgage was with Whidbey Island Bank. They sold that mortgage (debt) to one of those now-defunct C mortgagers like Countrywide or Crossland. I doubt Whidbey Island Bank did that to lose money, so they sold off risk and made some money. I think there was another transfer. Eventually it went through Bank of America. Maybe the next leap was to Greentree (but I think there were two Greentrees involved.) From there, DiTech, which just went bankrupt, and now to Shellpoint. If at each step the debt was sold for even a slight discount, they bought over $200K of debt in my mortgage for thousands less. I wonder how much I’d have to offer to clear it. I doubt they work that way. There’s too much profit in the monthly payments and possible sale of an appreciating property. That income stream can fund a lot of inefficiency.
Part of this post is a vent. Part is another entry in the (hopefully) inevitable sequel to my book on Dream. Invest. Live. Part of this is a light on the reality of the stereotype of conventional financial institutions. No one is perfect, but sadly, a corporation’s inefficiencies can cause a person’s late fees, wasted time, increased stress – all at a profit to the corporation.
Two years ago I was interviewed about My Forty Year Mortgage. The interviewer wondered why someone who understands personal finance well enough to write about it would knowingly agree to making interest payments for forty years. 1) It was the only mortgage modification option provided to me, and I was glad to take it and keep my home. 2) Inflation can significantly decrease the impact of the future interest payments. 3) The rate is capped at about 4%, historically low (with a hope that we don’t experience deflation). And 4) from what I’ve seen of the industry, I suspect it will be forced to radically change within that time because, as someone who has analyzed businesses and systems, their processes are not sustainable – and haven’t been for the over half dozen corporations I’ve been involved with.
Ironically, today’s episode may inspire me to go back to the beginning. As my income improves, and hopefully my credit rating returns, I wonder what sort of mortgage I can find, what sort of credible mortgage company I can find, and whether that would make my life a little bit safer and saner.
By the end of the day I decided to trust at least one person, the last one I talked to at Shellpoint. Instead of shuttling me along, she talked and listened for over a quarter of an hour. According to her, one of the terms of this transfer is a forgiveness of late fees for the first sixty days. I said my goodbyes, opened the bill pay menu, added yet another mortgagor to the list, and paid via an electronic service that will maybe could be possibly get there at or on the due date. Let’s hope there’s no reason to refresh this story. There are better things in life for me to write and think about.