Years ago when I had my first home, the mortgage was sold off by the lender, and the result was a dispute about the balance. I contended I owed around $3,000 less than the new servicer of my mortgage claimed.
So I had to prove my point by finding all my canceled checks. I also had to buy a book with an amortization table that allowed me to crunch the numbers myself. Obviously, this was in the pre-Internet days.
Now that we're in the era of computers, we assume the balances that lenders are tracking will be accurate. But they're not. With all the mortgage mess of the past few years, this is not a time to blindly trust your lender when they report a mortgage balance.
Errors can easily be made when loans are sold, or banks are absorbed by other banks and there's a migration of records. The balance can be all fouled up -- and almost always the error is not in your favor.
Thankfully, it's very simple to ensure you're tracked correctly. Print out an amortization schedule for free at DinkyTown.net or HSH.com.
Finally, it is imperative that you keep proof of all mortgage payments throughout the entire life of your loan. That avoids the danger of your payments being misapplied to another loan.
Banking -- much like life -- is not completely accurate. In this case, it's not that the banks are trying to cheat you; it's just that their record-keeping is incompetent.
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