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When A Bank Won’t Say Goodbye

Shakespeare wrote that parting is such sweet sorrow. Paul Simon observed that there must be 50 ways to leave your lover. Neither, I expect, ever did business with TIAA Bank of Jacksonville, Florida.

I call it the bank that does not know how to say goodbye.

Fifteen summers ago, my wife and I bought a weekend home in Vermont. In a separate but simultaneous transaction, we bought an adjacent vacant lot from the subdivision’s developer. A local bank provided mortgages on each parcel. We chose a 15-year term for the loans because we did not want to be paying off properties deep into our potential retirement years.

Banking has been around for millennia, but the self-amortizing mortgage is a relatively recent innovation. It came into being in the United States and Canada during the Great Depression of the 1930s. Prior to that, mortgages had relatively short terms. When the loans matured, borrowers had to either pay off a large balance or refinance their properties. The beauty of a self-amortizing mortgage is that if the borrower makes all the payments on time – payments that can stretch to 30 years, or occasionally even more – the final payment should reduce the loan’s balance to zero. There is no need to refinance.

We made those monthly payments unfailingly, including the final ones, which were due in September. Although 15 years is a fairly short term for a residential mortgage, it is still a long time. Life happens. In the intervening years, our original lender transferred our loans. We ended up making payments to People’s United Bank of Bridgeport, Connecticut, for the undeveloped lot, and to TIAA Bank for the house.

A couple of weeks after out final payments, we received a congratulatory letter from People’s United confirming that our debt was paid in full. They thoughtfully returned the original note I signed when we bought the lot and promised to promptly record the mortgage release at the county offices.

We expected a similar notification from TIAA, but the mail brought nothing. Instead, on Oct. 20, there was an automated phone call asking us to call the bank’s toll-free number. When I did, another automated message informed me that our October payment was not received, and offered to let me make it immediately over the phone. But we did not owe an October payment. I fought through the menu tree and, after waiting an inordinately long time, was connected to a representative named Eric.

I explained that I was being asked for a payment we did not owe. Eric put me on hold for five or 10 minutes, and returned with the news that the bank still showed an outstanding balance on the loan of precisely 47 cents.

Apparently, the decades since the Great Depression did not provide enough time for this particular financial institution to master basic banking math. TIAA traces its roots to 1918, when Andrew Carnegie founded it as the Teachers Insurance and Annuity Association of America. The banking unit, however, consists largely of the former EverBank, which TIAA acquired in 2018. EverBank was only organized in 1998, so it had a mere 22 years to learn how to conduct the business it is in.

Eric did not know how to resolve the situation immediately, but he promised a call back by the next day. None came. Four days later, another TIAA representative called and immediately launched into the disclosures required of a debt collector. I let her finish and then explained why there was no debt. She wished me a good day and hung up.

Fairly annoyed at this point, I fired off a letter recounting these contacts and asking the bank to discharge the loan. I even offered to pay the 47 cents.

I heard nothing further until a delinquency notice arrived on Nov. 13. Dated Nov. 2, it offered to put me in touch with federally approved counseling agencies to assist in avoiding foreclosure. It was signed by the bank’s Homeowner Solutions Team. Still no name of a human, nor a direct line to connect with anyone who could tidy up the bank’s sloppiness. But there was an email address, so I sent one that, shall we say, lacked warmth.

Then I got another letter, dated Nov. 12. “Dear Larry M. Elkin,” it began, “At TIAA Bank, we realize that everyone goes through difficult times. And that is when it is important to have someone on your side. We are on your side and we want you to keep your home.” If I truly believed these people were on my side, I would have sensed impending doom. But I read on. And there, finally, was the name of an actual living member of my species, a newly assigned “relationship manager,” no less. A relationship manager is very useful when you have a relationship to manage. Which, of course, I no longer did. But maybe she could help me extract myself from this relationship that seemed unwilling to go away.

Unsurprisingly, Kathy the relationship manager was not available when I called. But I was happy to be transferred to Liza, another relationship manager. I figured that if you want out of a relationship, promiscuity can help.

I directed Liza’s attention to the outstanding principal balance her computer was showing. Then I asked her to look at the maturity date, which was Sept. 1, 2020. I inquired, “Do you see the problem?” Yes, she certainly did. “Let me see how we can write it off,” Liza told me.

After a brief investigation she got back on the line. Usually, writing something off means the party doing the write-off bears an expense. Not this time. Liza informed me that besides the uncollected 47 cents on the mortgage balance, TIAA Bank would need $15 to cover the local filing fee to release the mortgage. You will notice that People’s United never asked for that $15. Nor have other banks where I have held mortgages to maturity. (Most mortgages never mature; they are paid off when properties are sold or loans are refinanced.)

It was a small price to pay for my freedom, so I gave Liza the necessary information to debit my checking account. Soon I received two emails. One announced that the loan was finally paid in full. It only required 180 timely monthly payments, three phone calls, an email and a letter. And it also required the amount specified in the other email I received from TIAA Bank, a memo showing that they had charged me a final $15.48.

That would be $15 for the filing fee, 47 cents for the remaining mortgage balance, and an extra penny for good luck, I guess.

My relationship with TIAA Bank was an accident, not a choice. Neither of us picked the other, apart from whatever due diligence they did when they acquired either ownership or servicing rights to our mortgage, or both. This is routine in the mortgage world. Only a few lenders make a practice of retaining most or all of the loans they issue. Selling off your loan frees capital for the lender to make new loans. This means it is easy to become a customer of a bank where you don’t know anybody and nobody knows you.

I have a lot of advantages in dealing with banks. Being a CPA and president of a financial planning company, I have closed many transactions in my work and in my personal life. I know the language lenders speak, and I know what to do when they don’t do what they should. Even with all this, it took me two months and considerable wasted time to get TIAA Bank to accomplish what People’s United did without needing to be asked. A consumer without my professional background might have even more trouble than I did.

While not exactly a love story, this tale has a happy ending. TIAA Bank and I can go our separate ways in peace. At least for me, this parting will be nothing if not sweet.

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