Oh, this is nuts! Let's just say it: THE SERVICERS ARE LYING THEIR BUTTS OFF!
I have a truck loan through a real bank doing it's own "servicing". It is set up like any loan; I agreed to send X amount of dollars every month for X number of months until the loan was satisfied. Just like a mortgage....
After the first few months of sending the regular payments I began sending the awful, horrible, dreaded "EXTRA PRINCIPAL PAYMENT"...OMG! What did the bank do? Did I melt their systems down? Did they have to call to see what I was doing by sending extra money ? Did they screw up the whole account and then try to take the truck?
Nothing happened!! I got statements that show I sent X dollars. There is a line that says "principal" and one that says "interest" so I know the split. AND I now get statements that show $0.00 due every month. I continue to send them money anyway. They continue to apply the funds and send me a statement showing the P/I split with zero dollars due for that month.
For the love of God...it is possible to do this. It has always been possible to handle this situation. It is not rocket science for pity's sake. Every bank does it correctly; only servicers have problems.
We have addressed this throughly in the past at this very site. The servicers use proprietary computer platforms that they built or had built themselves. They were deliberately set up this way as an easy portal for foreclosure. Anything out of the norm (such as Dee's extra principal payment) sends them and the monkeys running them into a doomsday scenario. They screech about the sky falling and then try to steal the money and the house. The more money you send, the more the computers and the monkeys screeches for foreclosure.
It is the servicing platforms and the ignorant fools running them that cause much of the problem. The software to apply payments correctly is out there; the servicers CHOOSE NOT to use it.
Look, Ocwen built its own servicing platform and is now peddling it to other companies (God help us!).
WEST PALM BEACH, Fla., Sept. 10, 2007 (PRIME NEWSWIRE) -- Ocwen Financial Corporation (NYSECN) announced today that Tavernier Capital Partners, LLC ("Tavernier") has chosen REALSynergy(r), Ocwen's commercial and multi-family loan servicing platform, to support its growing commercial loan portfolio.
According to Leland Harty, Chief Operating Officer of Tavernier, a system with the capability to ". . . efficiently manage the servicing requirements of Tavernier's current $1.6B commercial and multi-family loan portfolio while permitting Tavernier to handle future portfolio growth" were key factors in their decision to select REALSynergy(r).
REALSynergy is an advanced, Windows-based full-service commercial and multifamily loan servicing system. "REALSynergy's flexibility, end-to-end servicing capabilities and 24/7 web-based access to key loan data for Investors and Borrowers were must haves for Tavernier in its selection process to find the best possible technology solution to manage its portfolio. We're proud to have Tavernier as a new client and we look forward to supporting them as they continue to grow," commented Debbie Winslow, Director of REALSynergy. I bet you can Google "[Insert servicers name here] mortgage servicing platform" and find several of these platforms built by different servicers. And they will all contain the same flaw; an inability to deal with anything out of the norm. A late payment, BK, extra principal all will send them into a tailspin.
I have said, still say, and always will say that the servicing platform flaw was deliberate since others have managed to "get it right the first time".