Client has 2 mortgage late payments and credit score goes down 100 points.
But Athena, I wasn’t late!
Imagine my client’s shock when they found out that 2 of their rental property loans were 30 days past due, yet they have the loan on auto-pay. Yes, it’s true.
What they didn’t realize and didn’t see a notice in the mail for, was that their taxes and insurance had gone up, making the monthly payment higher. They never saw the notice that they had changed, and therefore never adjusted the amount that they were sending.
Luckily it had only gone past due for 1 month. Why were they past due? Because the amount of the payment they paid was $760 per month, yet the new payment to pay for the escrow impound shortfall was $938. So instead of applying the payment, the “servicer” had put the payment in suspense.
I was able in a conference call to explain to the servicer what happened, and asked where in the documents that the client signed when they got the loan did it say that they cannot suspend a payment for that shortage. 24 hours later, the manager had to admit that they had to remove these late payments off my client’s record.
Their credit score went back up to 765 (it had dropped to 660). Why does it matter? Because ALL credit gets more expensive, especially the mortgage, when you have a 660 and not a 765 credit score. Instead of 3.99% 30 year fixed, he was going to get 4.5%. Yikes. $80 more per month for 30 years. AND no home equity line of credit with that credit score.
Another great success and tons of savings for my client because they had an advocate on their side—ME. 🙂