Consumer complaint received 2019-11-04 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: JPMORGAN CHASE & CO.
State: NC

Complaint narrative:
I recently signed up for Chase bi-weekly mortgage payments as Chase advertised that I would " Save money '' and " make an extra mortgage payment '' each year. Both statement are inherently true : if you make an extra mortgage payment you will save on interest. 

What Chase does not tell the customer ( me ), is that they are not applying your bi-weekly payments to your mortgage Chase is withholding the first bi-weekly payment ( assuming in a non-interest bearing account ) and then paying your normal monthly loan payment once the second bi-weekly payment is received. The customer is " saving '' because there are 26 bi-weekly payments ( 52 weeks ) in a year vs. paying twice a month or 24 payments for 12 months. 

I believe there is possibly a TILA issue and a UDAAP issue here. First, my mortgage payment is not being applied to my account upon receipt. If I pay my mortgage bi-weekly, the funds could/should be broken down to principal, interest, and escrow, thus, reducing the principal amount every 15 ( or so ) days. If my principal amount is reduced bi-weekly, then my interest amount would/should be reduced bi-weekly. Over time, the amount of interest I pay would be reduced by # 1 the extra payment each year AND # 2 the interest savings from the bi-weekly payments. Currently, the only benefit to bi-weekly payments is making an " extra '' payment due to the number of weeks in a year. 

Secondly, I believe the bi-weekly payment marketing is misleading ( UDAAP ) as I was not aware that Chase would be withholding my bi-weekly payment until the second bi-weekly payment is made. There is potential that Chase is putting my funds into an interest-bearing Chase-owned bank account while they wait for my second bi-weekly payment, thus making more money in interest. By making bi-weekly payments, I forego the opportunity to earn interest on the money I give to Chase. Had I known that Chase would not apply my bi-weekly payment when it was received, I would not have signed up for bi-weekly payments as there is no principal and interest reduction value for the 15-16 days it sits in a Chase account. 

I called Chase on XX/XX/2019 at XXXX XXXX  EST and spoke with XXXX XXXX who listened to my complaint. I asked that my complaint be brought to the Office of the President. I also stated I would file a complaint with the CFPB. 

Please see below steps 1-5 for information regarding my mortgage payment history. 

1 ) XX/XX/2019 paid monthly mortgage payment ( {$1900.00} ) 2 ) XX/XX/2019 paid monthly mortgage payment ( {$1900.00} ) 3 ) XX/XX/2019 paid bi-weekly mortgage payment ( {$1000.00} ) - unapplied to account 4 ) XX/XX/2019 paid bi-weekly mortgage payment XXXX {$1000.00} ) - unapplied to account 5 ) XX/XX/2019 Chase utilized bi-weekly funds ( {$2000.00} ) to make regular payment of {$1900.00} plus {$16.00} extra principal. 

6 ) XX/XX/2019 paid bi-weekly mortgage payment ( {$1000.00} ) - unapplied to account

Company response to consumer: Closed with explanation