Consumer complaint received 2024-04-18
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Interest rate
Company: CMG MORTGAGE, INC (TX)

CMG Financial is the company that provided me Mortgage for my house. I recently called them to request them how I could make bi-weekly payments to pay-off my mortgage sooner. I tried performing this payment change on my account over the internet, but their platform does not allow me to schedule this type of payments. During the call, they told me that in order to enroll in the bi-weekly auto drafting program, I had to request that over the phone, they'd send me a letter, and I'd have to fill out a form and send it back to them. The letter took more than 15 days to arrive, and they have a cut-off day of the month if you want to have the bi-weekly payments to arrive on the following month. In order to make that happen, I had to rush it by sending a FAX of the form. After a few days, they replied saying that they could not start the auto-drafting because I did not pay the next month ahead. This is not something they disclosed beforehand, and it feels like they keep putting obstacles for people who want to pay-off sooner or reduce their interest burden. I had issues, for example, with making payments to my principal. You can't make payments towards the principal at any point during the month. There is a window, and if you're not in this window, they won't take your money. Luckily, I had made a payment towards my principal this month that was larger than my monthly dues, and I questioned them why I wasn't considered to be ahead on my mortgage for the bi-weekly autodrafting to begin. The representative said that it was " only '' a payment towards the principal, and in order to be considered ahead, I'd have to pay principal, interest, and escrow ahead, then I would have to also issue the bi-weekly payments for the same month that I just paid. Moreover, they said that the only benefit of bi-weekly payments was that you issued only XXXX extra payment per year, and no interest benefits come out of it. Reducing the interest burden is the sole purpose of paying bi-weekly. The way that CMG Financial works on this is by holding what is considered the first payment of the month without putting that towards your account and continues to charge you interest over that amount until the second payment of the month is issued. When that payment comes in, it is combined with the first, and applied to the account, and at that point the interest rate over the principal paid for the month stops accruing. Not only this business is creating undue burdens for people to pay-off their mortgage sooner, they're holding your money and illegally charging interest over money you paid towards the mortgage and that they have on hand. Neither the contract, nor the forms I used to file, mention these constraints. I have never found any other respectable financial institution that would cause so much trouble for people trying to be responsible and pay-off their mortgages. CFPB needs to step in, and force the business to change these policies and make it easier for people to make responsible financial decisions instead of putting roadblocks that discourages them from paying off early, plus, charging interest over money that I already paid and which they received is illegal, and they must immediately stop this practice.