Ref:  Rip-off due to Prepaid Penalty on Mortgage Loan  

We refinanced our property for $300,000.00 about three years ago. The property was refinanced in order to pay fixed mortgage payments on our property.

About a year later, the real estate taxes were increased by the City of Kissimmee (from $3,500 to $8,400 a year). We started to have problems in making the monthly mortgage payments. We took business loan in order to support the monthly mortgage payments. We exhausted the business loan because the economy started getting real bad. We started getting worried because all our life savings were involved.

We saw prices of properties in the area declining and businesses closing down, so we decided to sell the property in order to avoid foreclosure on the property.  Finally, we sold and closed the deal on the 30th of April, 2008. We took this step because we wanted to fulfill our obligations to the Bank by paying the loan back and saving some of our life savings. Many walked away from their properties and ignored their monthly payments, causing astronomical foreclosures we are seeing today.

We are challenging the way Wachovia Bank treated us. According to Wachovia Bank, the outstanding balance was $286,984.89. But at closing, a total amount of $ 308,461.40 was deducted from our proceeds as Payoff of Mortgage Loan by the Closing Attorney (Kaplan Law Firm, P.L.). According to the closing Attorney, Wachovia charged us additional $ 21,476.51 (Prepaid Penalty) for paying the loan back. There was no detailed calculations and statement from Wachovia Bank about the total balance and the Prepaid Penalty. Since then, we have been struggling to get our refund of $21,476.51 from Wachovia Bank. We have written so many letters to the Bank without success. We think that Wachovia is ripping us off. In this economy, nobody will penalize you for paying your loan off. After all, Wachovia Bank reinvested the principal that we paid back to make interest.

We made a research into what the law says about Prepaid Penalty and I quote: If a borrower has chosen a PPM and sells their home within the specified period of time, they DO NOT have to pay a penalty fee. Borrowers are required to pay a penalty fee only if they refinance or make a substantial payment against the mortgage principal.  The prepaid penalty from the sale was not justified.

  We are asking for fair treatment and our refund of $ 21,476.51 from this greedy Bank called

  Wachovia Bank.