Consumer complaint received 2020-04-15
Company: DISCOVER BANK
State: GA
Product: Mortgage
Sub-product: Home equity loan or line of credit (HELOC)
Issue: Trouble during payment process

Complaint:
TABLE OF MORTGAGE PAYMENTS AND INTEREST CHARGES BY 2 METHODS PLEASE NOTE : THIS TABLE DOES NOT SAVE IN TABLE LAYOUT IN THIS PROGRAM. PLEASE REFER TO ATTACHMENT WITH NAME : XXXX XXXX Table of Mortgage Payments and Interest Charges by 2 Methods.pdf. 

This table ( above ) helps to illustrate what is being said in the body of text below. 

Step 1 : What is this complaint about? 
The interest calculation method being used by Discover Home Loans seems to be a 12 Payments method that does not take into account the number of days since the last payment was posted. I was told by a Discover employee that they use a 360 day year as a basis for their calculations. With their 12 month method, they would collect more than 12 months interest if more than 12 payments were made in a 12 month period. The 12 month method also charges a full months interest, even if a payment is deposited only 14, 18 or 21 days following the previous payment being deposited. ( see table ) Step 2 : What type of problem are you having? 
I set up a spread sheet using a 360 day year ( same as Discover told me that they use ). However, my spread sheet takes into account the number of days between one posting and the next. 

Step 3 : What happened? 
I contacted Discover and complained over the phone about excess interest being charged, giving details. ( Date not recorded. ) I received a response letter dated XX/XX/XXXX saying We will need an additional 15 days to respond. 
I received a letter dated XX/XX/XXXX ( mailed XX/XX/XXXX ) which did not address the actual issue. Instead it undertook to give a tutorial of how an amortization schedule worked and how they had changed the interest charged on payments when extra amounts toward principal were included with the payment check. The letter was signed Research Department. 
I responded on XX/XX/XXXX in a letter to Research Department. In this letter I went into full explanatory detail about my complaint vis -- vis Research Departments response and the details of payments and charges on our account to that time. 
I received a letter from Discover, dated XX/XX/XXXX and postmarked XX/XX/XXXX. The letter acknowledged receipt of my inquiry regarding the above referenced mortgage loan and have referred your inquiry to the appropriate area for review. We will make every effort to provide a response to your inquiry as promptly as possible. In any event we will do so within the time limit required by law. 
As of this writing ( XX/XX/XXXX ), thirty-three ( 33 ) days after the last letter above, no further communication has been received. 
Discover will have collected ( as of the projected XX/XX/XXXX or XXXX, XXXX deposit of our most recent payment, which was submitted online XX/XX/XXXX ) SIX MONTHS INTEREST DURING THREE AND ONE-HALF MONTHS! 

Step 4 : What company is this complaint about? 
As of this writing on XX/XX/XXXX we have made six ( 6 ) payments* during the period for which only four ( 4 ) were scheduled. The resultant difference in interest calculated on a {$35000.00} loan at 4.99 % simple interest is {$210.00} This is at 134 days XXXX about 4 months ) following the issuing of the loan ( on XX/XX/XXXX ) and only 98 days ( barely over three months ) following the date the first installment payment was due ( XX/XX/XXXX ). Based on 4 months since the issuing of the loan, that is an average of {$48.00} per month extra interest being charged. 

Step 5 : Who are the people involved? 
Co-borrowers : XXXX and XXXX XXXX, both retired Discover 's Research Department no readable individual name was given. The XX/XX/XXXX letter was signed, with no typed name shown and the signature could not be read.

Company response to consumer: Closed with explanation