Consumer complaint received 2016-07-20
Company: BANK OF THE WEST
State: CO
Product: Mortgage
Sub-product: Home equity loan or line of credit
Issue: Loan servicing, payments, escrow account

Complaint:
On the response and Transaction statement you just provided titled " XXXX Bank Response and XXXX Enclosures ''. The way payments were applied to account is in complete contradiction to Promissory Note ( Note ). 
On the payment made on XXXX/XXXX/XXXX you state " there was a partial principal paid credit of {$90.00} '' when there is a Late Fee balance of {$330.00} due on account. It is not possible to accrue a principal credit when Late fees exist. You are claiming the XXXX/XXXX/XXXX {$600.00} payment resulted in a principal paid credit of {$22.00} when a late fee balance of {$220.00} exists. The Note states " Once the interest and principal are satisfied, then late fees may be allocated from a payment, if applicable. '' Your response is not supported by Note. According to Note If a late fee balance existed when the XXXX/XXXX/XXXX as well as the XXXX/XXXX/XXXX, XXXX/XXXX/XXXX and XXXX/XXXX/XXXX {$600.00} payments were made, {$570.00} would have been applied to the principal and interest owed and XXXX monthly payments of {$22.00} equaling {$90.00} would have been applied to the late fee balance owed. .Your explanation is that these XXXX {$600.00} payments resulted in a principal overpayment of {$22.00} per monthly payment totaling {$90.00} thereby reducing the XXXX/XXXX/XXXX payment to {$480.00} and a Late Fee balance existed. This accounting practice is Not supported by Note. It is not possible to accrue a principal credit from a payment when a late fee balance exists prior to payment. You and the Note state " The payment will be allocated to satisfy interest due first, then principal. Once the interest and principal are satisfied, then late fees may be allocated from a payment, if applicable. '' On XXXX/XXXX/XXXX, the only way possible a late fee balance of {$330.00} and a partial principal paid credit equaling {$90.00} could exist is by " applying back dated late fees to account. '' Same thing with these XXXX {$600.00} payments ( XXXX/XXXX/XXXX, XXXX/XXXX/XXXX, XXXX/XXXX/XXXX, XXXX/XXXX/XXXX, XXXX/XXXX/XXXX, XXXX/XXXX/XXXX and XXXX/XXXX/XXXX ). You claim these XXXX extra {$22.00} payment amounts end up a partial principal paid credit on XXXX/XXXX/XXXX payment. 
These XXXX {$600.00} payments should have been allocated by applying {$570.00} to the principal and interest owed and {$22.00} should have been applied to the late fee balance owed, if a late fee balance exists, according to Promissory Note. 
You then state that the {$450.00} payment on XXXX/XXXX/XXXX satisfies the remainder of the scheduled payment due of {$570.00} on XXXX/XXXX/XXXX. In your last response you stated the only way a automatic scheduled payment amount can change is when a payment is made 3 days prior to scheduled payment. In other words the {$450.00} payment made on XXXX/XXXX/XXXX can have no impact on XXXX/XXXX/XXXX {$570.00} automatic payment because payment was made within 3 days of automatic payment due date. Why was n't the XXXX/XXXX/XXXX payment allocated and applied according to Note? The only scenario where this could happen " these late fees were back dated to account. '' Please explain how my automatic scheduled payment amount of {$570.00} " due on XXXX/XXXX/XXXX '' was satisfied by the {$450.00} payment made on XXXX/XXXX/XXXX when there is only one day between payments? Since all XXXX of these {$600.00} payments were allocated only to principle and interest owed, proves to me, there was NO Late fee balance owed at the time payments were made. Now honor your obligations stated in Promissory Note and remove said late fees beginning XXXX/XXXX/XXXX thru XXXX/XXXX/XXXX and credit all said debits with interest. Treat my account in a fair and responsible way. This account needs recalculated according to this Promissory Note statement " Early payments will not relieve me of my obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principle balance due and may result in my making fewer payments. '' It is my hope that this letter explains with enough detail the corrections that need to be made on this account and corrections are made.

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