We have been paying Household Finance for our mortgage for 3 years. Nothing was ever applied to the principal balance. We contacted them a few times and were told that if we were not using their EZ Pay service, it could take 2 or 3 years of paying frontloaded interest before anything was applied to our principal balance. Living paycheck to paycheck, we could not afford to pay on their EZ Pay terms.
Finally, we requested a printout of our payments and their allocations. To our shock and disbelief, we discovered that we have been considered "late" on our payments ever since the very first payment even though we paid before the due date. We had been paying interest and late charge penalties for the past 3 years never being told that we were late. I check our account almost daily on their website and the current amount due section was always blank as if no payment was due. The monthly statement never indicated any penalties or past due amounts either.
We then paid $2300 in March to get caught up and only $50 was applied to the balance. Our statement showed that no payment was due until 5/1/03. I contacted Household and was told that even though the statement indicated that no payment was due for 2 months, if I did not make more payments before then, we would again fall behind.
This makes absolutely no sense and their attempts to explain their accounting practices make no sense to us either. No matter how many times they try to explain it, we can't understand it. Something needs to be done about predatory lenders like them. They had no business doing our refinance in the first place knowing our dire financial situation at the time. We did end up filing for bankruptcy anyway and now have a mortgage payment that is double what it was before we refinanced.
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