Consumer complaint received 2023-04-27
Company: WELLS FARGO & COMPANY
State: NY
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Struggling to pay mortgage

Complaint:
The basis of this compliant is Wells Fargos Failure to provide a Mortgage Modification per CPLR 3408, after Wells Fargo submitted a Net Present Value ( NPV ) document to my attorney showing my monthly income qualifies for a HAMP modification at 30 % of my monthly income. In Wells Fargos denial in XX/XX/XXXX, calculations came up with 42 % due to a Software Error and I got Unjustly denied. Next, after a 2nd Modification submitted showing an increase of an average of over {$2000.00} in monthly income Wells Fargo again denied in XXXX XXXX saying monthly income was still at 42 %? In addition to that, now that I have an increase of income Wells Fargo now States Investor does not participate 9 10 months later after my 2nd modification application submitted. This puts Wells Fargo in many violations of HAMP and shows they did not negotiate in good faith under CPLR 3408 ( f ). Wells Fargo continued the modification process even after the excuse of Investor does not participate for a Traditional inhouse Modification and strangely got denied again in XXXX XXXX based on again the 42 % denial. Again, this shows Wells Fargo did not negotiate in good faith under CPLR 3408 ( f ). 

This complaint herein is following up my XX/XX/XXXX complaint with Wells Fargos XX/XX/XXXX answer. On XX/XX/XXXX & XX/XX/XXXX, I spoke to XXXX XXXX of Wells Fargos Executive Process about my issues. Wells Fargo had me participate in the CPLR 3408 Mandatory Settlement Conference from XX/XX/XXXX XX/XX/XXXX. I submitted my 1st modification documents by XX/XX/XXXX. Wells Fargo Responded in XX/XX/XXXX that my modification was denied due to, your modified payment amount would be more than 42 % of your monthly income. My Attorney argued that their numbers were incorrect that my monthly income was 30 % and within HAMP guidelines and asked Wells Fargo to recalculate, but was denied again for the same reason. Denied due to Wells Fargos Software Error. 

Wells Fargos contention of my complaint is 1 ) Your HAMP denial was due to your modified payment amount would be more than 42 % of your monthly income. Using Wells Fargo NPV Document, they sent to my Attorney ( attached to this complaint ) proves my monthly income is 30 % of my modified payment and qualifies under HAMP. Wells Fargo using 42 % when it is actually 30 % shows Wells Fargo Software Error in calculations. On XX/XX/XXXX and XX/XX/XXXX I asked XXXX XXXX of Wells Fargos Executive Process, for the document they used showing how they came about the 42 % but they did not provide any in their XX/XX/XXXX XXXX denial letter to me. 2 ) your investor did not participate in HAMP, yet Wells Fargo has provided no Proof of that. On XX/XX/XXXX I asked XXXX XXXX of Wells Fargos Executive Process, for a copy of the Investors PSA showing any restrictions, but they have not provided one in their XX/XX/XXXX XXXX denial letter to me. HAMP Guidelines - The Servicers should know at the time of the identification of potential candidates for the HAMP programs the eligibility qualification of the candidates based upon the servicing agreement between the Servicer and the Investor, pursuant to the Pooling and Servicing Agreement ( PSA ). This is also a mandate of the Making Homes Affordable Program, Handbook for Servicers of Non-GSE Mortgages. Wells Fargo States 3 ) Wells Fargo is not able to provide a program or assistance option your investor does not participate in. Under Section 1.3 HAMP Guidelines Wells Fargo in writing MUST request from the Investor a Waiver of the Restrictions. On XX/XX/XXXX I requested from Wells Fargo a copy of the written request to the Investor for a waiver but they failed to provide one in their XX/XX/XXXX XXXX  denial letter to me. 

On XX/XX/XXXX Wells Fargos answer to my complaint filed XX/XX/XXXX stating, The proposed HAMP modification payment was used only as reference for the HAMP program and was not an offer. I never claimed it was an offer, It was a Proposed HAMP Modification. Wells Fargo submitted to my attorney Proposed HAMP Modification in their Net Present Value ( NPV ) Document ( attached here to this complaint ) around XXXX XXXX. The Proposed HAMP Modification is 43 lines of different inputs all relating to me. Wells Fargo sent a proposed modification Clearly shows it was being used for modification purposes. If this document was not an actual proposed modification, what was Wells Fargo using to come up with Your HAMP denial was due to your MODIFIED PAYMENT AMOUNT would be more than 42 % of your monthly income? For Wells Fargo to State this was only a Proposed HAMP modification and not an offer is Disingenuous in that under the HAMP Guidelines it uses the NPV to determine if a proposed mortgage qualifies. Per HAMP Guidlines - In HAMP, value-enhancing modifications are identified using the Net Present Value ( NPV ) model. The NPV Model compares the expected discounted cash flows associated with the modification of a loan. The Proposed Modification, HAMP uses the Net Present Value ( NPV ) Document Wells Fargo provided to me. 

Using numbers Wells Fargo Provided to me in a Proposed HAMP Modification Wells Fargo had my Monthly income at {$6800.00}, a proposed modification of Principal and interest of {$1300.00}, monthly taxes {$640.00} and Hazzard Insurance of {$130.00}. Using Wells Fargos Proposed HAMP Modification in their Net Present Value Document the monthly mortgage total ( mtg +Taxes + Ins ) = {$2100.00} divided by Wells Fargos provided monthly income {$6800.00} = 30 % modified payment not Wells Fargos claimed 42 %. My monthly income was 30 % well within the HAMP Guidelines. 
I submitted my second Modification request in XX/XX/XXXX where my income substantially increased adding about {$2000.00} to my monthly income average. This time in XX/XX/XXXX Wells Fargo Denied me based on your investor did not participate in HAMP. I have documentation of Wells Fargos Attorney who Wells Fargo list as Mediation Counsel through Wells Fargo, specifically requested investor to reconsider their HAMP denial but was denied again. Wells Fargos own Mediation Counsel believed I qualified.

Wells Fargo had me participate in the Mandatory Settlement Conference from XX/XX/XXXX XX/XX/XXXX when their investor did not participate in HAMP? Wells Fargo became the servicer of the Investor in XX/XX/XXXX, yet for over 2 years they did not know their investor participated in HAMP?

HAMP Guidelines - 1.3 Investor Solicitation - Within 90 days of executing a SPA, the servicer MUST review all servicing agreements to determine investor participation in HAMP.

According to Section 1.3 of HAMP Wells Fargo became the Investors Servicer in XX/XX/XXXX so they should had determined the Investors participation by XX/XX/XXXX over 2 years Prior to my CPLR 3408 Modification. Also, the Servicer as a MANDATE potential candidates for the XXXX programs the eligibility qualification of the candidates based upon the servicing agreement between the Servicer and the Investor pursuant to the Pooling and Servicing Agreement ( PSA ). Here Wells Fargo Failing to abided by HAMP statues and Mandates. 

Accordin

g to HAMP guidelines The Servicers should know at the time of the identification of potential candidates for the HAMP programs the eligibility qualification of the candidates based upon the servicing agreement between the Servicer and the Investor, pursuant to the Pooling and Servicing Agreement ( PSA ). THIS IS ALSO A MANDATE of the Making Homes Affordable Program, Handbook for Servicers of Non-GSE Mortgages. According to HAMP guidelines Failing to provide a waiver of the investors restrictions demonstrates a failure to follow the HAMP guidelines which constitute a failure to negotiate in Good Faith pursuant to CPLR 3408 ( f ).

Per HAMP Guidelines Within 30 days of identifying an investor as a nonparticipant, or as unwilling to extend its participation in MHA to include any extension or expansion of an MHA program, or identifying a servicing agreement that limits or prohibits a servicer from offering any assistance available under MHA, including HAMP Tier 2 modifications ( i.e., prohibition against modification of non-owner occupied mortgages or limits on multiple modification of the same mortgage ), the servicer Must contact the investor in writing at least once, encouraging the investor to permit modifications and other assistance available under the extended and expanded MHA programs. Servicers, within 120 days of signing the PSA, must create and maintain in their records an Investor Participation List containing the following information : ( 2 ) a list of those investors who do not participate in HAMP. 

In Wells Fargos answer here on XX/XX/XXXX to my XX/XX/XXXX complaint, states ; Wells Fargo is not able to provide a program or assistance option your investor does not participate in. Then Why did Wells Fargo have me for 15 months, wasting money paying attorneys during this time period, have me submit 3 modifications? Why not after the first modification denial XX/XX/XXXX, Wells Fargo did not notify me of investors participation but incorrectly deny me based on my income was 42 % and not in HAMP guidelines? When actually proven in Wells Fargos NPV Document attached to this complaint, shows Im at 30 % and Within HAMP Guidelines. Due to Wells Fargos Software Error, they incorrectly denied me. Why when I submitted my 2nd Modification where I show over {$2000.00} a month average increase in my income did Wells Fargo deny me in XX/XX/XXXX based on Investors participation? Wells Fargo states here, Wells Fargo is not able to provide a program or assistance option your investor does not participate in, why after my denial in XXXX XXXX that investor does not participate did Wells Fargo continue to have me reapply for a Modification? Wells Fargo had me apply for a Traditional in House modification in XX/XX/XXXX and getting denied again in XX/XX/XXXX due to your modified payment amount would be more than 42 % of your monthly income. If Wells Fargo, Wells Fargo is not able to provide a program or assistance option your investor does not participate in, why did Wells Fargo continue this charade? 

All Wells Fargo accomplished in the CPLR 3408 from XX/XX/XXXX XX/XX/XXXX and after I got the Investors Denial of not participating in HAMP, not after my first submitted modification but after my second submitted modification is run up in principal and interest, fees and attorney cost into the total owed in the mortgage making it impossible to seek outside modification. Wells Fargo actually after the XX/XX/XXXX denial continued a Traditional inhouse Modification and was denied in about XX/XX/XXXX for the same reason Your HAMP denial was due to your modified payment amount would be more than 42 % of your monthly income. Why did Wells Fargo continue the HAMP modifications with me after the investor said they did not participate? 15 months of principal and interest, fees, attorney fees being added to my Mortgage Balance making it impossible for me to seek outside modification. In addition to me paying my attorney their fees for about 15 months. Wells Fargo did not follow HAMP Guidelines, Wells Fargo miscalculated my monthly income ratio per HAMP Guidelines due to a Software error. Wells Fargo Failed to Negotiate in Good Faith per CPLR 3408 ( f ). 
In my conversation on XX/XX/XXXX with XXXX XXXX of Wells Fargos Executive Process after she tried to justify the Denial based on the Investors Guidelines. I asked her if Wells Fargo asked the Investor for a waiver but she did not know. As I mentioned above the servicer Must contact the investor in writing at least once, encouraging the investor to permit modifications and other assistance available under the extended and expanded MHA programs Per HAMP Guidelines 1.3. 

Appellate XXXX XXXX XXXX NY XXXX XXXX XXXX v XXXX XX/XX/XXXX Among other things, a failure " [ to follow ] HAMP regulations and guidelines... constitutes a failure to negotiate in good faith pursuant to CPLR 3408 ( f ) '' ( see U.S. Bank N.A. v Smith, 123 AD3d at 917 ; cf. HSBC Bank USA, N.A. v Sadeque-Iqbal , 177 AD3d 598, 600 ). 
I requested from XXXX XXXX of Wells Fargos Executive Process Under HAMP if denied a modification, I can Request a copy of the Waiver of investors restrictions that should be in the loan file. I also requested a Copy of the PSA ( Pooling and Servicing Agreements ) under RESPA for my review of the Investors Restrictions. Not only in my conversation but here also I am requesting the Waiver of investors restrictions that should be in the loan file and a Copy of the PSA ( Pooling and Servicing Agreements ) under RESPA for my review.

Also, under Section 6.5 of HAMP provides that " [ i ] f [ a ] servicer is subject to restrictions that make it unfeasible to complete the modification waterfall steps, '' the servicer Must maintain evidence showing " that the servicer made a reasonable effort to seek a waiver from the investor and whether that waiver was approved or denied '' ( Making Home Affordable Program, Handbook for Servicers of Non-GSE Mortgages, version 4.4, ch 2, 6.5 at 117 [ XX/XX/XXXX ]. Im asking Wells Fargo for a copy of the waiver if Wells Fargo asked the investor to reconsider the restrictions. 
CFPB final rules on mortgage loan servicing on XX/XX/XXXX - New national standards, changes to Regulation Z, Truth in Lending Act, and Regulation X, Real Estate Settlement Procedures Act. 

Servicing Policies, Procedures and Requirements - Servicers, must establish and maintain policies and procedures- Provide accurate and timely information to borrowers, investors, courts. 
Properly evaluate loss mitigation applications per investor guidelines. 
Wells Fargo in Violation of Section 1.3 of the Making Homes Affordable Program either did not comply under this section or unjustly had me apply for Mortgage Modification 2 times ( nearly 1 year ) before informing me of the Investors restrictions. After Wells Fargo notified me of the Investors restrictions in XXXX, Wells Fargo continued to have me apply for a Traditional inhouse modification into XX/XX/XXXX. Wells Fargos actions here for about 15 months added principal, interest, fees and attorney cost to the total owed making it impossible for me to seek outside financing. Also, my cost of paying attorney for 15 months. 

I have many Court Cases Where XXXX XXXX has offered modifications and some with Wells Fargo as Servicer. I have through an SEC Filing, XXXX XXXX for HSI Assets that they do offer Modifications. The Trust that XXXX is the Trustee of is the HSI ASSET SECURITIZATION CORP. TRUST XXXX-HE2. The following is from the SEC Filing Pooling and Servicing Agreement dated as of XX/XX/XXXX XXXX XXXX XXXX XXXX XXXX, as Trustee. Reconstituted Servicing Agreement, dated as of XX/XX/XXXX, by Wells Fargo Bank, N.A., as Servicer. XXXX XXXX XXXX XXXX XXXX XXXX - EXHIBIT A to Wells Fargo Bank , N.A . 's XXXX Certification Regarding Compliance With Applicable Servicing Criteria. 2 - Wells Fargo Bank , N.A . ( the " Servicer '' ) is responsible for assessing its compliance with the servicing criteria applicable to it under paragraph ( d ) of Item XXXX122 of Regulation AB as set forth in Exhibit A hereto in connection with the primary servicing of residential mortgage loans by its Wells Fargo Home Mortgage division 4- The Servicer used the Criteria set forth in paragraph ( d ) of Item 1122 of Regulation AB to assess the compliance with the applicable servicing criteria ; WELLS FARGO BANK , N.A . By : XXXX XXXX XXXX XXXX EXECUTIVE VICE PRESIDENT. SERVICING CRITERIA - General SERVICING CONSIDERATIONS- 1122 ( d ) ( 4 ) ( vii ) Loss mitigation or recovery actions ( e.g., forbearance plans, MODIFICATIONS and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable ) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. 

SEC Filing by XXXX XXXX  XXXX XXXX XXXX XXXX XXXX XXXX signed by Wells Fargo Executive Vice President XXXX XXXX XXXX stating under Servicing Criteria Loss mitigation or recovery actions modifications. 

It is clear Wells Fargo, 1 ) did not calculate my monthly income CORRECTLY DUE TO A Software Error to the proposed modification ( NVP ) saying it was over 42 % but was 30 % within HAMP Guidelines. 2 ) After I show my income increase by over {$2000.00} per month in XXXX  in my second modification, it now gets denied due to Investor does not participate and Wells Fargo has failed to provided any documentation of this. 3 ) Wells Fargo did not negotiate in good faith by offering me a Modification and taking 2 modification submittals till investor denied and then continued with me for an additional 5-6 months for a modification into XXXX. 4 ) Wells Fargo did not Negotiate in Good Faith by having me go through 15 months on Modification Negotiations even after Investor said did not participate. 5 ) XX/XX/XXXX Submitting my 3rd modification and already showing my income is less than 30 % of HAMP guidelines, Wells Fargo Denied me again saying my income is over 42 %. Wells Fargo Calculation Errors. 6 ) Wells Fargo made it impossible for me to get a modification on the outside market. 7 ) Wells Fargo Failed Section 1.3 of HAMP Within 90 days of executing a PSA, the servicer must review all servicing agreements to determine investor participation in HAMP. 8 ) Wells Fargo failed to ask the Investor for a Waiver per section 6.5 HAMP Guidelines. 9 ) Under HAMP guidelines the servicer Must contact the investor in writing at least once, encouraging the investor to permit modifications. 10 ) Per NY XXXX XXXX Among other things, a failure " [ to follow ] HAMP regulations and guidelines... constitutes a failure to negotiate in good faith pursuant to CPLR 3408 ( f ) '' Bottom line Requesting from Wells Fargo per HAMP, Wells Fargos requesting the Investor for a Waiver. Also, Requesting per RESPA a copy of Investors PSA showing Investor Restrictions.

Wells Fargo Unjustly denied me a Modification under HAMP Guidelines when I qualified at 30 % but in Wells Fargos Calculation Error got over 42 % and Did not Negotiate in Good Faith per CPLR 3408 ( f ). Not until my 2nd modification submitted showing an increase of monthly income of over {$2000.00} a month and probably even dropping Wells Fargos calculation of 42 % into HAMP guidelines did Wells Fargo come up with Investor does not participate in the program. Wells Fargo has never provided any documentation of proving this fact even though I have requested copy of PSA showing Investors restrictions. 

In my Last Complaint and in my phone conversation with XXXX XXXX of Wells Fargos Executive Process on XX/XX/XXXX, I requested Wells Fargo to Produce the Document with the Numbers used where they got my income was 42 % of the Mortgage, but they still have failed to provide any. Bottom line, Wells Fargo Document Net Present Value NPV attached to this complaint showing the proposed HAMP modification showing my monthly income is at 30 % of the proposed mortgage/taxes/ins monthly amount. 30 %, Well Within HAMP Guidelines and there is no Documentation of Wells Fargo Claims of investor does not participate.

Section 1.6 Compliance with Applicable Laws Each servicer and any sub-servicer that the servicer uses will be subject to and must fully comply with all federal, state, and local laws, including statutes, regulations, ordinances, administrative rules and orders that have the effect of law, and judicial rulings.

Wells Fargos contention of my complaint is your investor did not participate in HAMP, yet Wells Fargo has provided no Proof of that. 

Wells Fargo States Wells Fargo is not able to provide a program or assistance option your investor does not participate in. Under Section 1.3 HAMP Guidelines Wells Fargo in writing Must request from the Investor a Waiver of the Restrictions. On XX/XX/XXXX I requested from Wells Fargo a copy of the written request to the Investor for a waiver but they failed to provide one in their XX/XX/XXXXXXXX XXXX  denial letter to me. 
HAMP Guidelines - 1 Servicer Participation in MHA - Section 1.3, participating servicers are required to use reasonable efforts to remove any prohibitions and obtain waivers or approvals from all necessary parties in order to carry out the requirements of the SPA.

In Violation of HAMP Section 1.3 Wells Fargo has failed to provide any proof they contacted the Investor and request to remove any prohibitions and obtain waivers or approvals. In my conversation on XX/XX/XXXX with XXXX XXXX of Wells Fargos Executive Process I requested a copy of the Waiver they asked the Investor for and on XX/XX/XXXX I received a XXXX mail from Wells Fargo stating the reason for the denial of my complaint on XX/XX/XXXX and they did not provide the Waiver I requested. 

HAMP Guidelines - 1.3 Investor Solicitation - Within 90 days of executing a SPA, the servicer MUST review all servicing agreements to determine investor participation in HAMP. Within 30 days of identifying an investor as a nonparticipant, or as unwilling to extend its participation in MHA to include any extension or expansion of an MHA program, or identifying a servicing agreement that limits or prohibits a servicer from offering any assistance available under MHA, including HAMP Tier 2 modifications ( i.e., prohibition against modification of non-owner occupied mortgages or limits on multiple modification of the same mortgage ), THE SERVICER MUST CONTACT THE INVESTOR IN WRITING AT LEAST ONCE, ENCOURAGING THE INVESTOR TO PERMIT MODIFICATIONS and other assistance available under the extended and expanded MHA programs.

In Two ( 2 ) more Violation of HAMP Section 1.3 Wells Fargo failed to review and Identify the Investor as a participant in HAMP. Wells Fargo failed to contact the Investor in writing encouraging the Investor to permit Modifications. 
Section 2.2 Documentation - Servicers are required to maintain appropriate documentary evidence of their MHA-related activities. Required general documentation applicable to all MHA Programs includes but is not limited to : Evidence of assessment of investor willingness to participate in MHA programs and any specific outreach to investors or attempts to obtain waivers on either a portfolio or loan by loan basis, including copies of any contracts with investors relied upon in denying modifications. This should include, where applicable, documentation relating to specific parameters or limitations on participation required by investors for steps in the waterfall.

All documents and information related to the servicers consideration of the borrower for other loss mitigation alternatives.

6.5 Prohibitions on Modification Waterfall Steps- If the SERVICER IS SUBJECT TO RESTRICTIONS THAT MAKE IT UNFEASIBLE TO COMPLETE THE MODIFICATION waterfall steps, the SERVICER SHOULD IDENTIFY THIS PRIOR ( PRIOR ) TO PREFORMING THE NPV EVALUATION and NOT PREFORM AN NPV EVALUATION. Servicers must maintain evidence in the loan file documenting the nature of any deviation from taking any sequential modification step in the modification waterfall and the fact that the applicable servicing agreement, investor guideline or law restricted or prohibited fully performing the modification waterfall step. The documentation must show that the servicer made a reasonable effort to seek a waiver from the investor and whether that waiver was approved or denied. 

In Violation of Section 6.5 Prohibitions on Modification, Wells Fargo did provide to me a NPV when its Investor had restrictions. I have asked Wells Fargo on XX/XX/XXXX for a copy of the waiver Wells Fargo asked the Investor for but Wells Fargo has failed to provide one. 

Section 7 Net Present Value ( NPV ) Testing - All loans that meet the applicable HAMP eligibility criteria in Section 1 must be evaluated using a standardized NPV test that compares the NPV result for a modification to the NPV result for no modification. 
Wells Fargo filled out and presented to my Attorneys my NPV document, showing my monthly income, taxes, insurance, Principal and interest payment of the Proposed HAMP modification, a revised interest rate of 2 % and a mortgage term from 360 months to 480 months. According to HAMP Section 7 loans that meet the applicable HAMP eligibility criteria in Section 1 must be evaluated using a standardized NPV test so Wells Fargo determined that I was eligible for a HAMP Modification and in so determining went to the next step and filled out the NPV document. How can Wells Fargo determine my Qualification or fill out the NPV if the Investor does not Participate? It has already been stated in Section 1.3 that Wells Fargo should had determine investor participation in HAMP.

Continue of Section 7 Whether or not a modification is pursued, the servicer must maintain detailed documentation of the NPV model used, all NPV inputs and assumptions and the NPV results.

Again, Im asking Wells Fargo for the documents that show how they came up with your modified payment amount would be more than 42 % of your monthly income.

I have the Wells Fargo NPV proving using Wells Fargos numbers that I qualify at 30 % of HAMP.

Im asking Wells Fargo for the documents that show the written request ( per Section 1.3 ) of the investor for a Waiver of the restrictions.

Im asking Wells Fargo for the documents that show the Investors PSA showing the Investors Restrictions.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation