Complaint Review: Citicorp Trust Bank - Irving Texas

Ken has to be a PFS representative. There is no question about it in my mind..

No one else in the industry with the exception of PFS representatives feed the line of bull that "Interest Rates don't matter.

Sherry.. your instints about the high interest rate on the refi are correct, and you would be very wise to tell these peddlers of bad products to get out of your house.

I get so sick of hearing from PFS members that
"Interest Rates 'don't' matter".

Of course they matter.

Interest by its very definition is the 'charge' or 'cost' of borrowing money. The higher the rate, the higher the cost.

If interest rates 'didn't' matter, then why would the Federal Reserve ever get involved with monetary policy?

No one has ever heard Alan Greenspan or Paul Volcker, or the new Fed Chair Ben Bernanke say 'interest rates don't matter'.

So why do PFS representatives think they're smarter than the Federal Reserve?

Well, they don't. 95% of them (I'm being generous on this) have never heard of the Federal Reserve nor know what they do.

Ken mentions that PFS 'allows' you to pay off the PFS mortgage earlier.

What he fails to mention (misrepresentation) is that the PFS mortgage is done bi-weekly. Biweekly payments is basically the equivilant of paying a 13th monthly mortgage every year.

What he doesn't tell you, is you can accomplish the same thing by paying extra on your current mortgage, which most likely is at a lower rate.

Now, here is why the PFS representatives keep pounding the "interest rates don't matter' baloney: The higher the interest rate equals far more income to the lender in the first ten years.

Case Scenario:

PFS $175,000 mortgage at a 'generous' PFS rate of 8% paid bi-weekly starting in January:

In the first year you'll send $16700 in payments, of which $2850 is principle, and $13850 is interest.

Comparison:

Standard $175,000 mortgage at the rate Citigroup lists at its web-site of 6.7% and you set it up bi-weekly:

In the first year you'll send 14664 in payments, of which $3100 is principle, and $11564 is interest.


In short, its easy to see why PFS peddles its subprime mortgages..the consumer pays thousands more in interest every year.

Whats sad is these PFS representatives are financially ignorant, and pass that ignorance on to those they claim to 'help'.

Yes, I did say PFS members are financial ignorant (not all are, some are financially smart, unfortunately by pushing these products they are highly unethical)

Interest rates don't matter?

I dare any PFS representative to send an open letter to the Federal Reserve stating that.

the reason why the interest rates were higher is because stop and think about this for a second.. they will amortize it over 30 years (for example) this is where you get your monthly savings.. BUT THE CATCH IS, is take some of the savings and put them directly to principle.. And keep in mind, if you are saving anywhere from 200-800 dollars a month (not sure of your situation) and getting out of debt 5-15 years sooner, does it really matter what the interest rate is???

Would you rather have a loan of $1000 @ 6% for 12 months, or $1000 @ 9% for 6 months?

well, you'd be paying less with the 9% aaaand paying it off sooner! doesn't that make sense?


So, just for example, if your case came back on your mortgage with like 10% interest, we are to show you how to MANAGE MONEY PROPERLY by putting most onto principle alas, turning that 10% into 2% ..make sense? It's sad that you may have been uninformed by an agent, and not trying to be rude, but you must ask yourself one question.. are you upset about the service, or being misinformed? Because I have clients thanking me everyday for saving them $500/m and paying off their mortgage in 10 years instead of 25..

If you can find better at the bank, by all means! ..but I'll tell you right now what they will do or already have done!

They'll give you a lower interest rate to make people happy! but, remembering that example above, a lower interest rate doesn't mean good most of the time.. banks will neeeever show the bigger picture.. why would they? they would have to explain to you that they are going to make you pay thousands more with them with interest in the long run.. why do you think it takes 20 somes years to pay it off??? They are forever keeping us in debt.. does everyone around you have 5 years left of their mortage and have no credit cards or lines of credit? no.. 95% of people won't retire ontime or at all with not enough funds.. that's not from me, that is a national statistic! What's even funnier is that the same percentage have their rrsps and mortgages at the banks...hmmm..

How long are you locked in for? How much are you able to put towards principle in that time? and even so the case, will the banks do any better in that area? if so, then go and pay thousands more in the long run, nobody is stopping you.. but I've done this for every single family member and friend who can't wake up without a smile.. so please don't say that what we do is a rip-off ..

So, sorry if an agent misinformed you, but the fact of the matter is, if you are getting out of debt years sooner and saving mega bucks monthly, does it really matter?