Consumer complaint received 2017-12-07
Company: U.S. BANCORP
State: MN
Product: Mortgage
Sub-product: FHA mortgage
Issue: Trouble during payment process

Complaint:
Starting on XX/XX/XXXX US bank changed their mortgage payment processing hierarchy with no notice to me. Their new policy was to apply any payments received before the due date to principal only mortgage payments. And only apply payments if they are received on or after the first of the month. 

Had it not been for my own careful monitoring of my accounts, this change would have made my mortgage payments late and cost me approximately {$180.00} in related fees by now. 

I have issue with because section 4 of the Mortgage note clearly dictates that principal only payments can not be made unless I submit prior written notification instructing them to do so. 

I have not done so and have requested multiple times in writing to specifically honor the terms of the mortgage note and not apply any payments to principal only prepayment without my authorization. 

I contacted them by phone in XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX. Each time I was assured that it would be fixed and payment hierarchy would return to the former hierarchy that was in compliance with the mortgage note. 

When after the third time they failed to follow through on their promises made over the phone. I started making written complaints. I 've notified them XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, and again today. 

In every reply, they have so far complied with reversing and correctly applying the payments. But never once have they responded to any points of the complaint. They continue to ignore the issues I 've brought up in every single correspondence. 

Points being : 1 ) The policy change makes it so payments can only be applied on or after the due date. Which means any payment delayed by bank or postal mail will always be late. 
2 ) Their change in policy without notification would have resulted in a almost monthly accrual of late charges had I not been vigilant in my own accounts. 
3 ) Their change in policy will not allow my mortgage payments to be applied as I wish which the previous hierarchy gives the three fold benefits of ( a ) giving the mortgage a payment cushion that would protect me in the event of a future financial hardship, ( b ) Pays off the mortgage faster then the 30 amortization resulting in less interest paid over the life of the loan, and ( c ) make delinquency and late charges much less likely. 
4 ) While instead under their new policy : ( a ) it gives no safety net in the event of a future financial hardship, ( b ) virtually guarantees future late fees and increased cost of interest over the life of loan, and ( c ) makes a future severe delinquency highly likely. 
5 ) Their new policy is in violation of section 4 of the mortgage note which requires advanced written notification before any payment can be applied as principal only. 

They have never once addressed any of these points. Their only response is to say they have corrected the misapplied payments as a courtesy and repeat their new policy. 

Their constant ignoring of the core fundamental complaints shows their complete lack of care or interest in the consumers or their customers. It is very clear that the only real purpose of this change is because analysis shows that over the life of a loan they will earn more in both fees and interest paid. From their most recent response it is quite clear that they have no interest in ever correcting this issue and returning to the payment hierarchy that is in my best interests.

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 non-monetary relief