Fail me three times -- Citi Mortgage Continues

It is time for a third entry in to our continuing series on the failings of CitiMortgage.  If you are new to this series I will direct your attention to the previous postings here and here.  The entire saga began back in the fall when I decided to start budgeting my life appropriately and pay all of my major bills in installments every two weeks on my pay day.  There are many great advantages to this, some of them being:

• Automatic payments set up through my bank's FREE online bill pay service.
• With 26 paychecks in a year that works to a 13th yearly payment on large things such as the house and the car.  This helps to bring the balances down faster.
• My money is being budgeted far better than it was previously.

I started all of this up in early November.  In early December I received my monthly statement from Shity Citi telling me that I had not made my full payment when in fact they actually received three half payments (a payment and a half for those of us who went to public schools) between billing periods.

So I did what any normal person would.  I called the customer service 800 line.  As I have previously mentioned I try to be very polite to phone bank customer service reps, given my previous work experience.  Now my original call to the phone bank wasn't that bad.  The rep realized what I was trying to do, opened up a case to get it sorted out, and bid me a good night.  I thought that at this point things were sorted out.  I was wrong. 

The next month I got a statement that again stated that I had not paid in full, and was now accumulating late charges.  Frustrated I called customer service again.  This time the person on the phone suggested that I sign up for their BiWeekly Advantage plan.

I have received the latest reply from Citi's customer support group.  Let's take a look and see what we've got:

Thank you for your inquiry. To answer your first question, CitiMortgage would credit any additional funds received toward the principal balance of your loan if it were current. However, CitiMortgage does reserve the option to apply any excess funds toward any outstanding fees before crediting additional principal payments. And in our prior email, we explained that your credit could be affected if you sent payments less than the total amount due.

CitiMortgage does not offer a biweekly program; however, they do reccommend The BiWeekly Advantage Plan to their customers. When you enroll in The BiWeekly Advantage Plan, you are buying a service from FNC Insurance Agency (FNCIA), an affiliate of CitiMortgage and member of Citi. The one-time enrollment fee of $375.00 and the $1.50
transaction fee help to offset the costs of administering the Plan for an extended period of time. The Plan's program fees are comparable to other similar programs available.

CitiMortgage cannot credit funds less than the total amount due toward your loan, per your original loan documents. And, although The BiWeekly Advantage Plan and similar programs draft on a biweekly, weekly, or semi-monthly basis, they all remit full payments to CitiMortgage. The funds drafted by The BiWeekly Advantage Paln are held in a non-interest bearing Citibank account until they are credited to your loan.

I hope I was able to answer your questions. Should you have additional questions regarding the Plan, please feel free to contact FNC Insurance Agency at 1-800-955-6060†, option 3. Our Plan Specialists are available to assist you from 9 a.m. to 7 p.m. ET, Monday through Friday. You may also visit us on the Internet at www.citimortgage.com/biweeklyadvantatge.

Sincerely,
Vickie Murphy
Plan Specialist

Interesting, we actually have a name.  Well at least I am starting to get further up the chain on this issue.  Let's break this down, because there are few great nuggets of information in this.

you are buying a service from FNC Insurance Agency (FNCIA), an affiliate of CitiMortgage and member of Citi.

Wait, so I would have to pay Citi in order to pay Citi?  I think we are stepping in to recursion here.

The one-time enrollment fee of $375.00 and the $1.50 transaction fee

Whoa there buddy, the original customer service rep said the enrollment fee was only $300.  In the past few days it has gone up by $75?  And where did this $1.50 transaction fee come from.  The person I spoke to on the phone never said anything about a transaction fee.  Then again I cut her off from speaking the moment she mentioned the enrollment fee so she never really got a chance to tell me about the transaction fee.  So let's do the math here.  (For those of us who went to public school this is a word problem.)

I want to pay my mortgage off early.  It is currently a 30 year loan and bi-weekly payments could potentially cut the length of the loan down to 26 years.  I get paid 26 times a year.  If I make a payment every two weeks through the BiWeekly advantage program, how much money will Citi have made in fees from me?  Be sure to show your work.

$375 + ((26 * $1.50)*26) = $1371

Yes boys and girls, provided Citi never increases the fee (cause that never happens) Citi wants me to pay them an additional $1300 or more simply................to pay them.  Huh?

per your original loan documents

Basically it is a cop out.  They know they could do exactly what I am asking, they simply don't want to.  And because they don't want to, they put it buried in to the one of the 5 bazillion documents I signed at closing to make sure I don't do it.  Maybe I should go back and re-read every page I signed just to make sure I didn't sign away my kidneys.

So this calls for another letter back to Citi.  At least now I have a name to go with this whole situation:

To Vicki Murphy,

Vicky,

I do appreciate your answers regarding the BiWeekly Advantage plan. I unfortunately will not be participating in the program as I do not actually see an advantage. According to your previous e-mail, if I was to enroll in the program I would effectively be paying Citi an additional $1300 or more over the life of my loan for a service that my bank currently offers me for free.

I have instead opted to open a high yield checking account at my bank and will be transferring funds to that account to make my payments. This will hopefully result in both the loan being paid down sooner (which was my original intent) and that I will earn interest as opposed to paying additional fees.

I would encourage Citi management to review this plan and change their policies regarding how payments are made to accounts. Charging customers additional fees to simply process a payment is no way to build goodwill with your customer base.

Please verify for me that the late charges incurred have been credited off of my account.

But you know what, that just isn't quite enough satisfaction for me.  I also opted to send my Congressman a letter as well:

Mr. Peters,

I have recently become aware of Citi Mortgage's BiWeekly Advantage program where they charge customers for the "connivance" of making bi-weekly mortgage payments.

Citi refuses to allow me to send payments to them bi-weekly and instead requires that I use a fee based service that is a subsidiary of Citi Group to accomplish this.

Many people try to make bi-weekly payments on their mortgages to speed pay down. The effect can shorten a 30 year loan by up to seven years.

Citi's "BiWeekly Advantage" though has no advantage for their customers. Instead they charge a $375 enrollment fee and a $1.50 transaction fee every time they draft from my checking account.

Since this program is run by another subsidiary of Citi Group this is clearly a program designed to collect fees from customers and recoup money they would lose in interest by me paying down my loan.

Since Citi is the number #1 receiver of TARP funds (currently $50 Billion) I feel that this is is something that congress should investigate.

I have chronicled my on going dealings with Citi regarding this matter at my own website: http://blog.codejnki.com.

I myself have not signed up for this program, but fact that this program exists infuriates me and I feel that it is completely unethical.

I would appreciate any help or advice in this matter.

Read that little section again. I'll wait. 

Did you see that bit where Citi is the #1 receiver of TARP funds?  Yes we've given this incompetent group of idiots fifty billion dollars because they don't know how to make sound financial decisions.  And they have the audacity to tell me I can't pay them?

Folks, this is the reason why the economy is in the tank.  Because of geniuses like the guys who run Citi, hundreds of thousands of people are losing their jobs.  The banks are not winning any friends nor are they solidifying any of the arguments for helping them.

If a bank is "too big to fail" then it is "too big to exist".

Good luck, we're going to need it.