Tuesday, July 08, 2014

Banks are still committing suicide through death by a thousand cuts.

I've been feeling super gloomy about the world. As much as I try to distract myself, it's pretty obvious now that the excuse train is having an awfully tough time climbing that hill. And... I had to yell at my bank this morning. It was a couple of years into the recession that I fully came to understand why after the Great Depression some people never used banks again. Now I'm about as bitter as bitter comes regarding them.

I thought I was over yelling at them. I was finally able to get the PMI off my mortgage. The news came on the day those puke inducing GDP numbers came out. I murmured to myself - just in the nick of time.  I was done fighting them. It was all over.

Then I got a notice in the mail regarding my impound account needed more money instead of less due to the removal of PMI. All of a sudden they started charging me for flood insurance. They didn't send me a notice or anything they were going to start doing this. Now my rental is two blocks from a creek, and once was deemed to be in a flood zone. This all started mid-way through the recession. People in my town started getting bills for like two grand for flood insurance premiums because they had re-drawn the flood plane. At the time I felt like I dodged a bullet because I'd already pulled a flood insurance plan on my rental because - it's a rental. I was paying less than 400 bucks a year. And as it turns out - banks were inflating the cost of these plans during the crisis.

For a few years I was deemed in the flood plain, then one day I got a notice that they'd re-accessed it and the property was no longer in the plane. I still kept my policy because I was afraid if the State changed it's mind I might get stuck with one of those two thousand dollar policies. And who really knows how renters are going to trash a place.

So when I called the bank, I just wanted them to stop trying to charge me for insurance I was already paying for. Insurance that was not even mandatory for the loan. Paid for by me privately. Which just adds to the bitterness because you keep getting dicked around by them even when you are doing the right thing.

Now - when you don't have PMI on your mortgage, you aren't required to have an impound account. But I was going to keep it because it just made it easier. They would still pay taxes and homeowners insurance. Well... that is the way I imagined it. But it didn't work out that way.

The bank rep started trying to convince me they had always been paying the premium. Which I blew up about. This is how stupid they think you are. I figured they had fetched the insurance information from my broker because they had the correct insurance amount and date of renewal. Which it turned out to be true according the the bank rep. He then went on to try to shove this off on my insurance broker saying it was their fault if I had double paid. Now if there is one thing I'm sure of - someone would have sent a notice if a policy had been double paid. I don't care who the eff it would be - but on one side of the equation - someone would send me a notice. Probably my broker and the insurance company would just spit out a check. It's one of the few industries the government hasn't gotten their grubby hands on and still operates like the old days. And besides - when I was in a flood plain I got notices from the government. Then the bank would send a notice saying - you need to have insurance. The bank was just trying to rob me if I let them.

Anyway - long story long - I ended up yanking my impound account. Now they don't even get to collect interest on the amount of money that sits there. They better hope the others who are trying to get PMI off don't get the same idea.  The whole thing just defys logic. I understand them fighting tooth and nail about the PMI, but the flood insurance was just a calculated error on their part. They could have salvaged that problem. But they still refuse to treat clients like they need them. Thanks to the Fed.

My rental was refi'd when rates were down in the 3.5% range. Housing prices have spiked so much in 14 months I was able to get PMI off, and now no sweet impound account interest. Sure I'm just one person. But you can see the earnings problem that banks are getting themselves into if I'm not just an individual and other people get fed up like I am. Those low rates are going to fuck the market for a very long time.

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