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Account Histories Mistakes Snowball This section is why I made you trudge through amortization accounting in How the Amounts Applied to Interest and Principal Are Calculated. Remember the steps I outlined there: step one: multiply the principal balance by the monthly interest rate to get the amount that should be paid to interest. step two: subtract the amount paid to interest from the monthly payment. This amount is applied to principal step three: subtract the amount applied to principal from the principal balance you used in step one. This amount is the new principal balance. Step One: calculate Interest payment Principal balance x. monthly interest rate interest payment Step Two: calculate principal payment monthly payment -interest payment principal payment Step Three: calculate new principal balance old principal balance (the one used in Step One) -principal payment new principal balance The illustration below shows how amortization accounting causes mistakes to snowball. You ca use the Snowball Effect as support for two arguments: (1) the amount due calculated by the servicer is wrong because it fails to correct for mistakes that affect the calculations of principal and interest after the mistake was made; and (2) homeowners suffer real damages from the Snowball Effect -- they pay incorrect amounts for principal and interest.
NEXT: Terms Used in Account Histories
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
Account Histories Mistakes Snowball This section is why I made you trudge through amortization accounting in How the Amounts Applied to Interest and Principal Are Calculated. Remember the steps I outlined there: step one: multiply the principal balance by the monthly interest rate to get the amount that should be paid to interest. step two: subtract the amount paid to interest from the monthly payment. This amount is applied to principal step three: subtract the amount applied to principal from the principal balance you used in step one. This amount is the new principal balance. Step One: calculate Interest payment Principal balance x. monthly interest rate interest payment Step Two: calculate principal payment monthly payment -interest payment principal payment Step Three: calculate new principal balance old principal balance (the one used in Step One) -principal payment new principal balance The illustration below shows how amortization accounting causes mistakes to snowball. You ca use the Snowball Effect as support for two arguments: (1) the amount due calculated by the servicer is wrong because it fails to correct for mistakes that affect the calculations of principal and interest after the mistake was made; and (2) homeowners suffer real damages from the Snowball Effect -- they pay incorrect amounts for principal and interest.
 MORTGAGE RIGHTS
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
Account Histories Mistakes Snowball This section is why I made you trudge through amortization accounting in How the Amounts Applied to Interest and Principal Are Calculated. Remember the steps I outlined there: step one: multiply the principal balance by the monthly interest rate to get the amount that should be paid to interest. step two: subtract the amount paid to interest from the monthly payment. This amount is applied to principal step three: subtract the amount applied to principal from the principal balance you used in step one. This amount is the new principal balance. Step One: calculate Interest payment Principal balance x. monthly interest rate interest payment Step Two: calculate principal payment monthly payment -interest payment principal payment Step Three: calculate new principal balance old principal balance (the one used in Step One) -principal payment new principal balance The illustration below shows how amortization accounting causes mistakes to snowball. You ca use the Snowball Effect as support for two arguments: (1) the amount due calculated by the servicer is wrong because it fails to correct for mistakes that affect the calculations of principal and interest after the mistake was made; and (2) homeowners suffer real damages from the Snowball Effect -- they pay incorrect amounts for principal and interest.
 MORTGAGE RIGHTS
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
Account Histories Mistakes Snowball This section is why I made you trudge through amortization accounting in How the Amounts Applied to Interest and Principal Are Calculated. Remember the steps I outlined there: step one: multiply the principal balance by the monthly interest rate to get the amount that should be paid to interest. step two: subtract the amount paid to interest from the monthly payment. This amount is applied to principal step three: subtract the amount applied to principal from the principal balance you used in step one. This amount is the new principal balance. Step One: calculate Interest payment Principal balance x. monthly interest rate interest payment Step Two: calculate principal payment monthly payment -interest payment principal payment Step Three: calculate new principal balance old principal balance (the one used in Step One) -principal payment new principal balance The illustration below shows how amortization accounting causes mistakes to snowball. You ca use the Snowball Effect as support for two arguments: (1) the amount due calculated by the servicer is wrong because it fails to correct for mistakes that affect the calculations of principal and interest after the mistake was made; and (2) homeowners suffer real damages from the Snowball Effect -- they pay incorrect amounts for principal and interest.
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.  MORTGAGE RIGHTS