I have a home mortgage with Citibank/Citimortgage. Recently, I decided to pay down some of the principal on my home by sending an additional payment to the bank to be applied toward the remaining amount I owed on my home loan. They provide a form you can mail in for this purpose, and clearly on the form with the payment, you can specify how much of the payment is to go toward paying down principal, escrow, monthly notes, and so on.
I sent in a payment of $5000 to pay down the principal. It was clearly indicated as a payment toward the principal on my home loan. I later called Citimortgage and found out that they took a big chunk of my advance payment and applied it to the monthly mortgage note!
Understand also that my mortgage payment was being *automatically* deducted from my bank account, and I was not past due on any mortgage payment whatsoever, and have never been past due. Citimortgage stole a portion of my prepayment and applied it as a regular mortgage payment (meaning a ton of it went toward interest, into their coffers) *without my consent and against my explicit instructions*. I consider this totally unethical, sleazy and possibly quite illegal. There may even be a class action issue. Is Citicorp taking a portion of all payments their clients make toward reducing principal on loans and repurposing it as a lucrative-to-them mortgage payment?
This is an outrage, and it is an example of the ways in which a big company steals money from its customers, and in this case from a customer who is even paying more than they are required to!
If you deal with Citibank and Citimortgage, go over your transactions carefully! Call them up and make sure you're not getting ripped off!!
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