What they did to us, they're doing to others. It's a pattern of conduct, and it's hurting homeowners across the nation.When interest rates dropped in early 2013, we decided it would be a good idea to refinance our house. Our current mortgage represents about 18.5 percent of the value of our home. Not a huge balance. Rates were low, and we decided it was a great time to pull some money out for long-needed repairs. In particular, we had a master bathroom that had been torn out down to the studs which we needed to renovate.
We also have a daughter in college and so a refinance to a 30-year fixed rate mortgage that would have set our debt to about 30 percent of the value of our home would also have reduced our payments by about $300 per month, which would ease cash flow needs for the college expenses. We could pull enough money out with those numbers to renovate all of the bathrooms, the kitchen, and redo the floors.
Overall, it seemed like the time was right. But Wells Fargo thought otherwise.
We initiated the process in April. In May the appraiser came out and did the most thorough appraisal I've ever seen done. She took pictures of everything, including the gutted master bath. Just after that, we received a notice of conditional approval which also told us we should start putting together a lot of paperwork so the underwriter could move the application through rapidly when our processor requested it. We did that.
The processor didn't request anything from us until June 10th, with our rate lock expiring on June 25th. We sent all of the paperwork in via electronic means to expedite what we thought would be a rubber-stamp approval. After all, we thought, we're not exactly irresponsible borrowers, nor are we borrowing anything close to the value of our home.
I should tell you here that the only reason we even received a request for documents was because we followed up with the processor. He did not ever call us or request anything without us asking him what they needed, and this was the first occasion among what would become many where a phone call from us sparked a frenzy of documentation activity from them. If we hadn't called, I'm sure they'd have just let it die.
On June 24th, the rate lock was extended to July 9th so we could supply more documents the processor didn't request.
On July 9th, the lock was extended to the end of the month so we could yet again produce more documents relating to our homeowner's association fees and insurance.
I was convinced that Wells Fargo had no intention of approving this loan by the time the second rate lock was in place. I was convinced they had no intention of refinancing for a lower interest rate with cash out, but would instead find any excuse they could to decline it. My husband was willing to offer them more of the benefit of the doubt than I, attributing the delays to processor incompetence more than intent, but I was already seeing story upon story about how people were being shut out of loan approvals during low interest rate periods. This isn't incompetence. It's a pattern of conduct.
OOPS! We forgot to tell you something...
As I mentioned, the appraisal was done in early May. Nothing was hidden. The appraiser sent in photos of the gutted master bath with the appraisal. There were no surprises for the bank, but as it turned out, they had one for us.
On August 1st, after a week of fruitless efforts to reach our loan processor, we were connected to another processor in the same office who advised us that as policy our loan would not be approved until the renovations on the master bath were complete. As policy? You mean we should have known that back in April?
What they had just told us was almost unbelievable. We were required to complete the renovation of that bathroom ahead of actually securing the refinanced mortgage we were planning to use to renovate it! Not only that, but now we had a drop-dead date of August 10th. After that day, the application would be dead forever.
We bit back our frustration yet again and considered our options. It seemed to make sense to go ahead and do the renovations because we could borrow funds or simply use savings and replenish it from the proceeds of the loan. IF we could find anyone who could do it that fast who might also be trustworthy.Lucky us! Through family members, we reached a contractor who was willing to finish everything by this last Sunday, just in time for the deadline. We gave the okay and they started working the very next day. They finished by the deadline, too.
Last week, we once again contacted Wells Fargo to advise that the requirement for the renovation ahead of approval would be met and to find out how to get the appraiser back out to sign the certificate of completion. No one returned our call until last Friday, and when they did, the news was pretty devastating.
Wells Fargo doesn't love you anymore. At least, not at 3.65%
The loan was declined, the application was dead, and gee, they were sorry we'd just spent thousands to complete that renovation but there was nothing that could be done about it.
But wait! There was something they could do. They could expedite a new applicationfor a fixed rate higher than our current interest rate or a variable-rate mortgage. Yes! They could do that for us. Of course, you'd have to be a moron to agree to either one of those things, but hey, this is Wells. They can do whatever they want.
We're not done fighting the battle yet. Enter the CFPB...
What options did we have but to accept their decision as final? Well, there were a couple of options, and we exercised both.
I went right on over to the CFPB and filed a complaint. I uploaded all of our documentation, the piles of email requesting status updates and verifying that there were no other outstanding requirements. I told them the whole sad tale of woe. In the spot where CFBP asked for our desired outcome, I said we wanted the bank to issue the loan at the agreed-upon balance, interest rate and terms.
That effort is in process. When you file a complaint, the CFPB sends it to the bank and gives them 15 days to respond. We are waiting for the response, but we expect it to be something close to the one we got from the sympathetic manager who couldn't actually do anything.
After filing the CFPB complaint, we also tried to go over the heads of these mid-level employees to somehow see if Wells could fix their mistake, because yes, this was entirely their 'mistake' and yes, you should assume those quotes around the word 'mistake' are air quotes. Let's just be honest: Wells didn't really want to make a loan to us at low interest rates when they could wait it out and get us for higher rates.
This was the outcome of our final conversation with the guy who oversees all of their loan processors: A sympathetic voice saying "Gee, I'm really sorry we did this to you but we can't undo it. Sure, we can refund the fees you paid but we can't actually live up to the terms we prematurely agreed to." Also, he was very sorry that we were out thousands of dollars to complete that renovation for the loan they had no intention of approving, but the dude who took our initial application and request should have told us that right up front. Oh, that didn't come up in the conversation? Well, we're sorry the processor never mentioned it either even though he had the information right there in front of him from May 10th to August 1st without breathing a word of that dirty little secret. We're so sorry that happened to customers of the bank who have been customers for well over 20 years but we still can't undo it.
These are the things the sympathetic supervisor with no answers said. With that, we're left with a sour taste in our mouths, we're a few thousand dollars poorer than we were the day before, but damn, we do have a nice renovated master bath! So there's that. Tuition is due in another month and then every three months following, but it's great to know we finally have that pesky renovation done so we could be shut out of loan terms that worked for us in so many ways.
Wells Fargo Believes in Profits Over People
This is why Wells Fargo needs to be dismantled. It's too big to fail in general. More importantly, it's too big to fail customers. Their conduct indicates an absolute lack of will to actually serve the people who generate their profits. They screw up someone's finances and shrug. On the other hand, if we missed a mortgage payment and shrugged, they'd laugh at us and foreclose.
They're a big and powerful bank; we are but mere blips on their radar. Noise. They work hard at their PR and make it seem like they give a damn, but they don't. I'm willing to bet ten bucks right now that we will discover internal policies circulated during the time interest rates were lowest that told processors to delay the process as much as possible until rates rise.
It's clear they were angling for higher rates. In June, 2012 they were rallying the troops to get to the 40 percent mark. In the first quarter of 2013, they achieved that goal. Early in the second quarter of 2013, rates were they lowest they had been in years, which is why we decided to try to refinance. But later in the quarter, those rates rose. Here's what Wells Fargo officials said in July, 2013, right about the time we were pushing to finish our puny little transaction:
Wells Fargo Chief Financial Officer Timothy Sloan told investors Friday that despite a decline in mortgage applications, the pipeline so far remains strong.
Mortgage-interest rates rose significantly late in the second quarter, which discourages homeowners from refinancing mortgages. However, Sloan said, “We still have a relatively large unclosed [mortgage] pipeline at the end of the quarter.”
Applications for mortgages from borrowers to purchase homes remain strong, Sloan said during a conference call after the bank reported second quarter earnings. But refinancings of existing mortgage are expected to decline, he said.
J.P. Morgan Chase's CFO Marianne Lake said earlier Friday morning that if interest rates remain unchanged or even rise, the refinance market overall could shrink by 40%. Sloan didn’t take as bleak a view on the business.
Of course he didn't, because he had that big unclosed pipeline of applications that were going to be trashed and restarted with the higher interest rate. He hoped. Or presumed.
Verdict: Wells Fargo is too big for ordinary people
When a business is too big to give a damn about doing business ethically and with some degree of transparency, they're too damn big. Since they don't care what piddly-ass people like us think of them, the only voice they'll hear is the government's.
Wells Fargo has foreclosed on people wrongly and shrugged.
Wells Fargo has forged documents to obtain the right to foreclose on people wrongly.
Wells Fargo has dragged out mortgage modifications so unreasonably and for so long that people end up losing their homes anyway.
Wells Fargo has cost this long-time customer time, effort, and a lot of money in order to shrug and say they're gosh-darn sorry but their hands are tied. Just tied. Nothing they can do about it. Nothing at all. They say that to lots of other customers, too.
They don't have to be accountable, they don't have to be ethical, and they don't have to give a damn. That's a recipe for an entity that needs to be broken up already. Since they haven't been, now is as good a time as any to begin.
In the meantime, if you have read this far because you're in the middle of a similar nightmare, I have advice for you. Run, don't walk, to the CFPB and file your complaint now. This is the one place where you might actually get clout you don't have on your own. Do not assume the bank is being incompetent or bureaucratic. Assume they are doing their level best to screw you and get an advocate on your side.
As for us, well...we have a new master bath, no plans to try to refinance now that interest rates have risen so much, and the hope that perhaps that CFPB complaint will take hold. I'll keep you posted.