Consumer complaint received 2018-02-07
Company: Seterus, Inc.
State: TX
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
On XX/XX/XXXX I made a payment through the Seterus website in the amount of {$18000.00}, during the XX/XX/XXXX grace period ( XX/XX/XXXX - XX/XX/XXXX ). The payment made on XX/XX/XXXX was made in the same manner as I had routinely done for several years. I relied on the fact that my payment would be applied in the same manner and interest would be calculated in the same manner as every other time I had made a payment before the grace period had lapsed. Previously, the payment had always been applied as follows : the scheduled required payment went to interest, principal, escrow, and then any late payment fees due. Any monies in excess of the required payment went into suspense and a few days later were applied to the principal balance as of the end of the month for which the payment was due regardless of the exact date of the payment. 
The website would not allow me to pay the entire {$18000.00} ( which according to my calculations would pay off my mortgage as of XX/XX/XXXX ) a single transaction, therefore, I made three consecutive payments of varying amounts. I paid {$8000.00}, {$5400.00} and {$1800.00}. Seterus arbitrarily applied monies first to XX/XX/XXXX payment ( which I don't have a problem with ), next, to the prepayment of XX/XX/XXXX and XX/XX/XXXX scheduled payments ( with the interest being calculated on the balance after the regular XX/XX/XXXX payment and before any other reductions to principal ), then, applied {$5400.00} to principal, then, applied an additional {$1800.00} to principal, and lastly put the remaining monies I paid ( {$8000.00} ) into suspense. On XX/XX/XXXX they reversed the {$8000.00} and mailed a check to me, which I never cashed or deposited. I enclosed the original check, as well as, another check for the same amount which they had reissued ( because I told them I'd torn the other one into tiny pieces ) in my communication dated XX/XX/XXXX. Nowhere, as of today, is that {$8000.00} reflected in the activity on my account. Apparently it has vanished. 

The Seterus website specifically states that you must call if you want to prepay monthly payments. I reiterate, in the past, every time I made a payment in excess of the monthly payment it went first to pay any late fee and the monthly payment due, then whatever excess was paid went to principal. I contend that my payment made on XX/XX/XXXX in the amount of {$18000.00} should have been credited as follows : o {$84.00} should have been credited to outstanding interest as of XX/XX/XXXX this exact amount appears on the attached statement dated XX/XX/XXXX for the XX/XX/XXXX payment o {$16000.00} should have been credited to principal and is the exact amount reflected on the statement dated XX/XX/XXXX o {$1800.00} should have been credited to escrow which is the amount on the XX/XX/XXXX statement o {$38.00} should have been credited to late fees as stated on the XX/XX/XXXX statement o {$26.00} should have been credited to recording fees o {$.00} should have been returned as an over payment Seterus arbitrarily applied the payment as follows : o {$240.00} was credited interest o {$9300.00} was credited to principal o {$1100.00} was credited to escrow o {$38.00} was credited to late fees o {$8000.00} was returned as an over payment I placed a telephone call to verify my loan was paid off and I was told it was in payoff. A week or so later I received a check in the amount of {$8000.00} which was never cashed. Seterus refused to explain their actions other than telling me it was required by law when a payment to payoff a loan was short. I really dont understand why they refused to explain the payment application with me other than telling me that the payment was applied using guidelines established by statute and that we must request in writing a copy of the statute used. I have asked to speak with their legal department, as well as, their pay-off department and was told that was not possible. We find it ludicrous to believe that statute required the payment which was remitted to be applied in the manner which it was and, that the information had to be requested in writing. 

I feel that Seterus has not acted in good faith and did not attempt to mitigate damages in any way, and in fact, applied monies in a manner to harm our position. For example, applying monies to pre-paid payments. Calculation of those payments prior to application of monies to principal. Inflating interest prepayment amounts calculated before monies were applied to principal and inflating the actual interest due.Rather than applying the larger sums of money to reduce principal first they chose smaller sums and failed to apply the single largest payment made. Attached is the written communication I have had from Seterus. I did not include all the offers to refinance and the foreclosure threats. Thank you for this opportunity to expose Seterus 's unethical handling of my mortgage. 

Attached is the written communication I have had from Seterus including copies of statements that my payoff was calculated from. I did not include all the offers to refinance and the foreclosure threats. 

Thank you for this opportunity to expose Seterus 's unethical handling of my mortgage.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation