Consumer complaint received 2015-05-26
Product: Mortgage — Conventional fixed mortgage
Issue: Loan servicing, payments, escrow account — 
Company: Nationwide Biweekly Administration, Inc. (CO)

There are companies preying on new homeowners, who are more vulnerable than experienced homeowners. They are searching public records to find sales, and mailing letters to the consumers. The XXXX mailings are from the Nationwide Biweekly Administration ( NBA ) and another company. There are more details below about the NBA, but the other company offered to give me copies of documents I already had for a {$100.00} fee. I believe it was either the deed or the promissory note. If I had the letter, I would give the company name. In any case, it was a scam and it is disconcerting that the CFPB is allowing these companies to continue functioning. 
I have a mortgage through a credit union, but serviced by another company. They do not offer biweekly payments through the lender or servicer, even though there is no prepayment penalty. I have been getting mail from a third party, the NBA, since we got the mortgage, offering to set up biweekly payments and demonstrating the interest savings. I read a blog at this link : XXXX, and found out that the company is a scam. My company was n't that same company, but it was just as predatory to consumers. Here is a summary of predatory actions : The word " Administration '' in the company name makes it seem like a legitimate government entity. 
The {$1000.00} set-up fee they charge is disclosed inconspicuously on the back of the letter, in tiny print, and the complaints on the XXXX website indicate that they do n't verbally disclose the fee over the phone, when setting up the service. 
The sample calculation for the expected interest savings is not relevant to consumers. It says something like, " This is not your interest rate or loan amount -- your actual savings may differ '' and they inflate the amount of savings being advertised by using a sample rate about 2 % higher than market rates. I do n't believe the rate applies to consumers at all, because credit scores low enough to cause rates that high would n't qualify for mortgage at all. 
They disclaim that they are n't affiliated with any lender, but do n't mention that your lender may not accept partial payments. If your lender is like mine, it says right on the statement, " Partial payments will be held in a suspense account until the full amount is collected. '' That means, even if I send in extra payments toward my next mortgage payment, they will sit in an account with no interest savings. ( " Principal-only '' payments are another matter -- this is about partial payments here, not extra payments. ) What 's worse : I do n't earn interest on a suspense account like I would in a savings account. 
The savings quote assumes payments are immediately applied to the loan : that is the only way to save on accruing interest. Otherwise, there is no benefit to doing this if the lender waits until the full amount is there. If the lender does n't accept the payments, then the service consumers are paying for is not being rendered and they are getting no benefit for the consideration being paid. Is n't that breach of contract? Who would set up a payment plan to only pay fees and not get any benefits? 
Companies such as the NBA do a disservice to borrowers and should not exist. This is the sort of company the CFPB should protect consumers from. The XXXX gave this company an " A '' ranking but they defraud consumers. Read some of the comments on the XXXX website to get an idea. Even if the NBA offered a legitimate service, they charge a fee for something that would be available through the mortgage lender or the servicer for no cost. It also would n't hurt to define " XXXX-time '' homebuyers as a legally protected class and make the fines for defrauding them extra steep just to deter this kind of predatory behavior. I have a copy of the letter available.