Bank of America
Bank of America changed interest calculation method on existing mortgage

After more than two months of frustration with Bank of America customer service, they finally acknowledge that they changed the method used to calculate mortgage interest without notifying me. My loan is a standard conventional mortgage, and they had always used the previous month's ending balance to calculate the interest payment. But since November they have used something called "split interest" which appears to be a daily interest calculation. This results in larger interest payments than the standard monthly calculation when payments are made during the month.

This change occurred at the time they moved mortgages to a different Bank of America subsidiary and issued new loan account numbers. The change in interest calculation method may have affected all mortgages that were moved.

Since Bank of America had not notified me of the change, they have agreed to credit the overcharge to remaining principal. But they also say they will be sending a notice that future interest calculations will use the split interest method.

How can a bank change the interest calculation method on an existing mortgage? Is this legal?

Company: Bank of America
Country: USA
State: North Carolina
City: Charlotte
Site: bankofamerica.com

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