Convenience Fee For Mortgage Payment?

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squint5
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Convenience Fee For Mortgage Payment?

Post by squint5 »

I just refinanced and my new loan servicing company is charging a convenience fee for making electronic mortgage payments, if the payment is made after the 5th (sometimes the 2nd, 3rd or 4th) day of the month. My grace period to make a payment is through the 15th day of the month.

I'm in California and I've been told that these fees are illegal, unless they were disclosed when I first signed my loan documents or they reflect the actual cost of the transaction process. In my case, neither exception is applicable.

I'm wondering whether anyone else pays a similar convenience fee, in California? I believe that different states have different rules.

Thanks in advance for your input.
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onthecusp
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Re: Convenience Fee For Mortgage Payment?

Post by onthecusp »

Not in CA. I use Chase bank "billpay" which sends a check if they don't have an electronic system linked directly to Chase. I set it to automatically send the same amount every month timed to get there a couple of days early.

Super convenient, more so than logging into yet another mortgage site.
TimeTheMarket
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Re: Convenience Fee For Mortgage Payment?

Post by TimeTheMarket »

Sounds like a late fee, which is tiered by now late you are.
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02nz
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Re: Convenience Fee For Mortgage Payment?

Post by 02nz »

Make the payment from your bank's online bill pay service instead. It can almost certainly be done electronically, if not the bank will send them a check.
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Nate79
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Re: Convenience Fee For Mortgage Payment?

Post by Nate79 »

Also pay your bills on time. That also helps not have to pay these late fees......
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anon_investor
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Re: Convenience Fee For Mortgage Payment?

Post by anon_investor »

squint5 wrote: Thu Jul 09, 2020 10:54 pm I just refinanced and my new loan servicing company is charging a convenience fee for making electronic mortgage payments, if the payment is made after the 5th (sometimes the 2nd, 3rd or 4th) day of the month. My grace period to make a payment is through the 15th day of the month.

I'm in California and I've been told that these fees are illegal, unless they were disclosed when I first signed my loan documents or they reflect the actual cost of the transaction process. In my case, neither exception is applicable.

I'm wondering whether anyone else pays a similar convenience fee, in California? I believe that different states have different rules.

Thanks in advance for your input.
Why not just pay the few days early to avoid the late fee?
Topic Author
squint5
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Re: Convenience Fee For Mortgage Payment?

Post by squint5 »

It's not a late fee. A late fee is incurred when the payment is received after the 15th of the month.

This is a convenience fee, incurred just for making an electronic payment after the 5th of the month or sometimes earlier.

As far as using a billpay service, I receive checks from tenants via billpay and the payments are often late. I'm not sure if it's the billpay processor or the post office, but I'm not comfortable that a billpay check will always arrive on time.
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anon_investor
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Re: Convenience Fee For Mortgage Payment?

Post by anon_investor »

squint5 wrote: Fri Jul 10, 2020 10:51 pm It's not a late fee. A late fee is incurred when the payment is received after the 15th of the month.

This is a convenience fee, incurred just for making an electronic payment after the 5th of the month or sometimes earlier.

As far as using a billpay service, I receive checks from tenants via billpay and the payments are often late. I'm not sure if it's the billpay processor or the post office, but I'm not comfortable that a billpay check will always arrive on time.
Can you avoid paying the fee by paying earlier, like on the 1st of the month?
Tortoise2030
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Re: Convenience Fee For Mortgage Payment?

Post by Tortoise2030 »

Most mortgage notes have a clause that states a fee can be charged (usually 5% of the mortgage payment) if the payment is received after the 15th of the month. Can you "push" the payment from your bank account instead of setting it up at the mortgage servicer's site? Maybe you can avoid the fee this way?
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whodidntante
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Re: Convenience Fee For Mortgage Payment?

Post by whodidntante »

What does it matter if others have the same experience? It's either allowed or it's not. My default position is that fees have to be disclosed. And also, certain fees may not be allowed at all. Perhaps the bank just needs training on your rights. Either way, someone will learn something. If you've actually been charged a fee, file a report with the CFPB.
bikesandbeers
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Re: Convenience Fee For Mortgage Payment?

Post by bikesandbeers »

I am in CA and the mortgage service changes a fee to make payments by phone, and a different fee to make one-time online payment although these would seem to fall under the "change a fee that represents actually costs" My auto pay has been set up for an ACH on the first of the month for years. I don't recall there being an additional fee or any option to pay on a different pay.

Are you trying to pay later in the month because you get rent from tenants on the 1st? If seems like you just need to make the cashflow work one month and pay on the first.
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squint5
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Re: Convenience Fee For Mortgage Payment?

Post by squint5 »

There's a timing issue ---rent is due on the first of the month and I expected to have until the 15th of the month to pay the mortgage.

I'd like to know definitively whether they can charge the fee and, if not, have the State tell them to stop. But the answer is not just sitting on a State of California website page, and the State agency I reached out to doesn't seem to understand the issue or care much about it.
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8foot7
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Re: Convenience Fee For Mortgage Payment?

Post by 8foot7 »

Would suggest writing the state attorney general and the state commissioner of banks to inquire about specifics. Typically the staff in these offices will contact the concerned parties directly about their behavior should it run afoul of rules.
02nz
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Re: Convenience Fee For Mortgage Payment?

Post by 02nz »

squint5 wrote: Sat Jul 11, 2020 8:30 pm There's a timing issue ---rent is due on the first of the month and I expected to have until the 15th of the month to pay the mortgage.

I'd like to know definitively whether they can charge the fee and, if not, have the State tell them to stop. But the answer is not just sitting on a State of California website page, and the State agency I reached out to doesn't seem to understand the issue or care much about it.
I think this "grace period" until the 15th is pretty standard with mortgages, but it IS a "grace period," meaning your payment is, strictly speaking, late.

Again, why not just pay from your bank's bill pay service? I've had some obscure lenders/servicers, but every single one could be paid electronically, meaning 1 business day for payment to arrive.
Topic Author
squint5
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Re: Convenience Fee For Mortgage Payment?

Post by squint5 »

I guess I win the obscurity pool. These guys can't be paid electronically via billpay.
sycamore
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Re: Convenience Fee For Mortgage Payment?

Post by sycamore »

Anything helpful with a google search? There seem to be some hits...
https://www.google.com/search?q=%22conv ... ifornia%22
Topic Author
squint5
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Re: Convenience Fee For Mortgage Payment?

Post by squint5 »

Thanks. Saw that stuff before. Nothing definitive.
wfrobinette
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Re: Convenience Fee For Mortgage Payment?

Post by wfrobinette »

squint5 wrote: Fri Jul 10, 2020 10:51 pm It's not a late fee. A late fee is incurred when the payment is received after the 15th of the month.

This is a convenience fee, incurred just for making an electronic payment after the 5th of the month or sometimes earlier.

As far as using a billpay service, I receive checks from tenants via billpay and the payments are often late. I'm not sure if it's the billpay processor or the post office, but I'm not comfortable that a billpay check will always arrive on time.
Saw your other post about rent due and you trying to pay with this months rent.

I suggest you get a cushion and pay on the 1st of the month or before via bill pay.

Pay next months mortgage with this months rent. Not pay this months mortgage with this months rent.

If you can't do that then you are risking getting behind if tenants don't pay or you have vacancies. You've over extended yourself.
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SmileyFace
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Re: Convenience Fee For Mortgage Payment?

Post by SmileyFace »

Sounds like a late fee to me (just by a different name).
You bill is due by the 5th.
If you want to pay the bill after the due date but before the grace period ends - you are assessed a "convenience" fee. After the grace period you likely get an additional "late" fee. The words "Grace Period" indicate you are paying late.
Just pay it on time (if you pay your bill before the 5th there is no fee - correct?).
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mmmodem
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Re: Convenience Fee For Mortgage Payment?

Post by mmmodem »

Also in CA. I don't know what the law is. I recall a fee for paying my mortgage online as well. The only way to waive the fee was to sign up for automatic billpay. Unfortunately, it was not a simple sign up process and required me to fax a voided check or for them to deposit a few cents and take it back out for me to confirm the amount or some nonsense like that.

It was too annoying a process. I decided to use my bank's online bill pay instead to send a check. Not sure what your worries are about a late check. Just send it in earlier.
obgraham
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Re: Convenience Fee For Mortgage Payment?

Post by obgraham »

They must be the only remaining mortgage lender to discourage electronic payment.

Makes me wonder what else they're behind the times at.
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willthrill81
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Re: Convenience Fee For Mortgage Payment?

Post by willthrill81 »

02nz wrote: Sat Jul 11, 2020 8:39 pm
squint5 wrote: Sat Jul 11, 2020 8:30 pm There's a timing issue ---rent is due on the first of the month and I expected to have until the 15th of the month to pay the mortgage.

I'd like to know definitively whether they can charge the fee and, if not, have the State tell them to stop. But the answer is not just sitting on a State of California website page, and the State agency I reached out to doesn't seem to understand the issue or care much about it.
I think this "grace period" until the 15th is pretty standard with mortgages, but it IS a "grace period," meaning your payment is, strictly speaking, late.
I don't know that banks still do this, but at one point in time with at least some of them, if you made a payment after the 1st but before the 15th, they reported it to the credit bureaus as late.
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02nz
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Re: Convenience Fee For Mortgage Payment?

Post by 02nz »

squint5 wrote: Fri Jul 10, 2020 10:51 pm As far as using a billpay service, I receive checks from tenants via billpay and the payments are often late. I'm not sure if it's the billpay processor or the post office, but I'm not comfortable that a billpay check will always arrive on time.
Your tenants' checks are probably arriving late because they are being scheduled late. You can look at the date on the check to verify.

Anyway, it's almost a certainty that your bank's bill pay service can pay your lender electronically, so no check is necessary. And if it is necessary then just schedule it with enough lead time.
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