You have answered your own questions. Sounds like your servicer has no clue as to how open-end line of credits work.
Service Provider for Mortgage Loans-HELOC
XYZ is our service provider for mortgage loans. They are telling us that there is no way to split out the daily interest to only calculate it based on the initial draw at closing. The system is going to calculate interest owed on the total available balance of the HELOC. Our core provider cannot charge prepaid interest on the full amount of a HELOC, just the total of the first advance. So they are both different and it does not seem permissible to charge a customer money on something they have not borrowed yet. Please let me know if XYZ can even accrue on the full amount?
First published on 04/05/2020