Google is useless
November 11, 2019 7:53 AM   Subscribe

The company that administers my mortgage charges a $20 "pay to" fee. What the heck is a "pay to" fee?

I have spent the past hour Googling to no avail. I called the company and was put on hold, and an automated message says the wait time is over ten minutes. I'm hoping someone out there can answer this question for me quickly so I can stop being on hold as I really need to get back to work.
posted by thereemix to Work & Money (4 answers total) 2 users marked this as a favorite
Could this be a “pay to pay” fee, along the lines of this proposed class action suit against US Bank? This is a fee for certain manners of payment — by phone and online in the case of the lawsuit.
posted by danielparks at 9:17 AM on November 11, 2019

Unless you need to know right now, send the servicer a letter asking them what the charge is for, attaching a copy of the bill with that line highlighted. Request a written reply by mail or email, which may prove useful later.
posted by snuffleupagus at 1:10 PM on November 11, 2019 [2 favorites]

I think danielparks is on to something. How do you actually transmit money to your mortgage lender every month? Some of them will charge you for what they deem to be more processing-heavy methods (check, ACH transfer) in order to incentivize you to go to a direct debit or some other lower-friction method of payment. It's definitely worth asking them, though.
posted by pdb at 4:07 PM on November 11, 2019

As a guess, I would suggest that it's related to paying by check or money order (such as with a physical document that requires human/manual processing to some degree) as most personal checks have a "pay to the order of" line where you write the name of the business/etc recipient.

If that company's current processes don't yet have a way to process the payment as if it were a debit (as some are able to) and perhaps require a person go visit an actual bank or have a armored truck visit in order to process it, that could translate to cost on their end to complete it.

Another idea is that the mortgage lender may have to pay for other expenses on your house rather than strictly themselves for the loan; some mortgages include the house insurance or land/property taxes, so they in turn would also need to "pay to" other groups as a function of their mortgage loan services..
posted by Quarter Pincher at 8:57 PM on November 12, 2019

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