Consumer complaint received 2024-11-02
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Trouble during payment process — Payment process
Company: ALLIANT CREDIT UNION (CA)

In XX/XX/scrub>XXXX XXXX, we originated a XXXX in the amount of {$100000.00} in connection with a piggyback mortgage transaction in order to purchase our second home. On XX/XX/XXXX, we were assessed a {$150.00} fee for account opening, which we paid. The originating lender is XXXX XXXX, and our assigned sub-servicer, XXXX. Our goal was always to pay off the XXXX second lien off in full as soon as we sold our home to pay off the high-cost variable rate XXXX under which we were making interest-only payments. When we closed on our home XX/XX/XXXX and received the wired funds, I ensured that the remaining principal balance of {$100000.00} was paid off by making a principal-only payment directly on the XXXX portal. Given that the next interest-only payment would become due on XX/XX/XXXX, I was excited to avoid paying the new interest-only payment due at that time, and instead expected to see a payoff quote ( as requested on XX/XX/XXXX ) that reflected only the interest which had accrued between XX/XX/XXXX ( last statement date ) and XX/XX/XXXX. When I called on XX/XX/XXXX to request the payoff, I was shocked to learn that XXXX had applied the principal only payment instead to a {$150.00} annual account fee, due XX/XX/XXXX, and the interest due XX/XX/XXXX. When I questioned why they had applied my {$100000.00} principal-only payment not just to the principal balance of {$100000.00}, but instead to these XX/XX/XXXX and XX/XX/XXXX payments, the representative stated that they had the discretion to do so if the payment being made was close enough to the due date. While I completely understand the assessment of the reconveyance fee ( as the amount and timing of assessing the fee complies with CA law ), and of course understand the assessment of interest accrued to date, the payoff amount reflecting the XX/XX/XXXX interest amount and XX/XX/XXXX annual fee charge does not seem fair. In fact, this seems like an unfair practice to me. Despite marking the payment as a principal-only payment in the online portal, I was injured by the payment instead being applied to an interest amount and fee amount not yet due, a practice I could not reasonably avoid. The XX/XX/XXXX statement said my principal balance was {$100000.00}, and by paying before the due date stated therein, XX/XX/XXXX, I assumed that the principal owed would continue to be {$100000.00}. If I pay the balance down to {$0.00} ahead of XX/XX/XXXX, then how can I be charged a full interest-only payment assessed against {$100000.00} on that due date? In addition, the {$150.00} fee seems like an exploitative junk fee. The Note is clear that the account maintenance fee of {$150.00} is paid to the servicer at account opening and annually thereafter. First, why is it due this year on XX/XX/XXXX the Note says it's due " annually thereafter ''? Second, even if true, why is my principal only payment going towards the payment of this fee that is not due until over a month later? I kindly request that XXXX XXXX XXXX XXXX 's subservicing practices for potential XXXX issues, including assessing whether its Fee Schedule includes junk fees that contravene the XXXX Note issued by XXXX XXXX, and that the CFPB oversee its review. Thanks!