Money Obedience

We follow our own advice, and that’s why we hold on to cash as much as we can.

For example, we used to be on a bi-weekly payment scheme for our mortgage, which is held at CitiMortgage – but we’ve stopped that and we’ve gone back to monthly payments, which keeps more money in our pocket. The bi-weekly payment scheme belongs to yet another Citi company. (I know. It was silly to join this scheme in the first place for a fee. But that could be the subject for another post.) Anyhoo, Citi made money off of us in more than one way. (Not just by our paying a mortgage to them, but paying them fees to pay our own mortgage.) So be it. My mortgage broker must have sold the mortgage to them way back when, because I certainly did not choose to work with them. I would never, since I had a bad experience with Citigroup years ago.

Anyway, back to the story. A couple months ago we suspended the bi-weekly mortgage payment scheme because we did not see a need to pay down the mortgage faster than we have to. We wanted to hold on to cash instead. So, we called Citi, stopped the automatic withdrawal, and told Citi that we would pay the mortgage ourselves starting with the March payment. So far so good.

I sent a check to CitiMortgage a few days before the mortgage due date and then I set up the payment to go automatically to them from the bank where I have my checking account, so I know that I will always stay current with the mortgage payments.

While I was away at the end of March, this payment was made automatically. When I came back and I looked through my mail, I also checked the mortgage statement – admittedly, hardly paying attention to it, since all should be in good order. But the April statement said that I owed twice the normal amount, plus a hefty finance charge. You can imagine that such a large amount of money caught my eye immediately. How did that happen?

Well, I called Citi and found out that at the end of February Citi allocated my payment to principal rather than to the regular March payment, even though I wrote “March payment” on the memo line of my check! Are these guys nuts? It took me a phone call and some lengthy explanation to make them change these payments to consider them mortgage payments and not donations to their company, and to get them to refund the finance charges. Believe it or not, Citi made it sound like they did me a favor! Ridiculous!

Anyway, the point here is to remind you to be sure to check your statements regularly, any and all statements, for that matter. Even though you took care of things, know that banks make mistakes, and lots of them. Ha, as if I had to tell you. Just look at the state of the American banking system! If it was not for the government, the banking system would have collapsed by now. And who is leading the pack on the way down? You’ve got it: it’s Citi! What a shocker!