These two companies’ market and offer mortgage borrowers special programs to supposedly pay off their mortgage early and save on interest expense. The program is referred to as the Bi-Weekly Mortgage Program. Equity Plus and Lipsky & Associates markets these programs as a simple, logical option to reduce the term of your loan. They claim the programs are safe, automatic and easy to budget. They even go so far as to claim the programs build equity for you three times faster than paying your mortgage monthly.
This is how it works, the lender convinces borrowers to make periodic payments more than once a month in order to accelerate the payoff date. For example, for the Bi-Weekly Program, if your mortgage is $2,000 per month, the companies require that you pay $1,000 every two weeks instead of the normal $2,000 once per month. This causes the borrower to make more than 13 payments in a year. In addition, they offer similar programs where the borrower pays their mortgage payment semi-monthly or weekly as well. Many of these programs do not work in your favor as advertised. The companies do not disclose that they hold your “partial” payments until a “complete” monthly payment is made. This is like providing these companies a no-interest loan very month. This way they apply payments is in direct violation of the contractual terms promised to you in your mortgage. The plans do not reduce the term of your mortgage nor save you interest compared to simply making an additional payment on your mortgage. It may be difficult for the average borrower to discover how payments are being applied. We have the experience and expertise to determine if the program is actually working to your detriment.
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If you or someone you love has been a victim of this unfair practice, contact the national consumer protection lawyers at Golomb Legal today at 1-800-355-3300 or 1-215-985-9177, or fill out our confidential Contact Form.
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