First mortgage statement and due date a month early (loan, interest rate, credit report)
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Hi, I've supposedly cleared this up with my lender, but today I received a statement saying that my first mortgage payment is due February 1st. We were told at closing that our first payment is due on March 1. A quick glance at the loan papers confirmed this. I spoke with two different people at our lender who confirmed that their system was showing March 1 for the first due date. They said it was likely an error and that I will be receiving a new statement in a few days for March 1. Fair enough.
Perhaps I'm being paranoid, but should I send some sort of error notification through the official channels, as I've been told is my right to ensure that I've covered all my bases? If it was human error to send the first statement a month early, I don't see what could prevent human error in claiming we missed our first payment. But if their systems are showing March 1, as well as the loan docs, I don't see how anything could possibly be misconstrued. Thoughts? And how frequent are human errors like this in mortgage servicing?
I would follow up again and request and eFax of your first payment statement so that you can relax.
Also check the date on the statement you just received it may have been printed and in the mail before your last conversation.
I know someone who paid their mortgage late, due to a glitch, and every month there after was recorded late. A headache to fix a year after the fact when they went to go make an investment property purchase. Then lender had been holding a whole payment in a suspense account each month and posting it when the next payment arrived.
Human errors happen and are understandable the key is to fix asap and safe documentation, names and confirmation/trouble ticket numbers when circumstances call for a little extra diligence.
Technically, if you close in January, your first prorated payment IS due February 1st, for the period of January you owned the house. But it should be prorated and paid as part of the closing process and you never really notice it, it is just one of those many numbers on your closing statement. The first full payment (the first one you have to actually send money in for on your own) is not due until March 1st. I assume the first payment notice you received is not prorated and is for a full month. If that is the case and you closed after January 1st, then yes, this is incorrect. Mortgages are paid in arrears, meaning February 1st would be the payment for January 1st through January 31st. If you did not own the house that whole time, you do not owe for that whole time.
When your new statement arrives, if the problem has not been corrected, it should show either a prior payment is past due, late fees due, a higher than normal current balance due, or all 3. If not, you should be all good. I would hang on to that statement.
If you don't get further documentation about this by around February 15th, better follow up further on it though. If you wait until March 1st and it HASN'T been fixed, the lender could report it as over 30 days late, and it would go on your credit report, and that is a lot more trouble to get fixed. If you don't see anything in the mail before the 15th, call the lender again. Don't get off the phone until you get them to give you something in writing verifying that no payment is due for February 1st and that you are not past due. Make note of who you spoke to, and the date and time.
Technically, if you close in January, your first prorated payment IS due February 1st, for the period of January you owned the house. But it should be prorated and paid as part of the closing process and you never really notice it, it is just one of those many numbers on your closing statement. The first full payment (the first one you have to actually send money in for on your own) is not due until March 1st. I assume the first payment notice you received is not prorated and is for a full month. If that is the case and you closed after January 1st, then yes, this is incorrect. Mortgages are paid in arrears, meaning February 1st would be the payment for January 1st through January 31st. If you did not own the house that whole time, you do not owe for that whole time.
When your new statement arrives, if the problem has not been corrected, it should show either a prior payment is past due, late fees due, a higher than normal current balance due, or all 3. If not, you should be all good. I would hang on to that statement.
If you don't get further documentation about this by around February 15th, better follow up further on it though. If you wait until March 1st and it HASN'T been fixed, the lender could report it as over 30 days late, and it would go on your credit report, and that is a lot more trouble to get fixed. If you don't see anything in the mail before the 15th, call the lender again. Don't get off the phone until you get them to give you something in writing verifying that no payment is due for February 1st and that you are not past due. Make note of who you spoke to, and the date and time.
Thank you for the excellent advice. Yes, what you describe in the first paragraph is precisely what happened. They told me that I would be getting a new statement in the next few days, but I'll be sure to stay on top of it.
It can be a real pain to fix in the future so get on it now. Send you document along with a letter demanding that they fix this in a given time, make a copy and send it registered. You'll need it if they fail to remove it and you need to fix it through the credit reporting agency.
If you closed in the first week of January, and IF you were tight on cash, your lender could have done what we call an "interest credit" and actually move up the payment date by one month.
So, how can you tell? Grab your HUD1 and look on page 2 on line 901. Did they charge you interest for the # of remaining days in the month you closed? Or, is there a credit (it would show as a negative)?
Chances are if your paperwork (Note) states payments to start in March, all is good. What concerns me is the industry is so automated to accommodate regulations this kind of mistake is not common.
The chance your TIL (Truth in Lending) has been calculated incorrectly exists - but so what? It doesn't change anything, (like your interest rate or payment amount) but it is an example of how paralyzed the industry is with all the balls in the air - had an error been caught just prior to closing (assuming yours is wrong), your closing could have been delayed.
You have almost 3 weeks to the 17th of February (after which, late charges will be applied) - more than enough time to get your confirmation in writing (one way or another). Make sure you do get something in writing - as silly as it may seem. Better safe.
Thanks, SmartMoney, very informative. I sent you a PM but I'll open the question to everyone. After a quick Google, the answer seems obvious, but just want to confirm. Line 901 does indeed show that we were charged interest for the remaining days in January after our closing on the 3rd, no credit shown. This surely means that our first payment is due on March 1, correct?
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