Consumer complaint received 2018-07-07
Company: WELLS FARGO & COMPANY
State: NY
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
Matter Requiring Attention : Alleged unethical treatment of principal pre-payments when monthly mortgage pre-payments were made.

-- -- Situation : In early to midXX/XX/XXXX, I made ( 11 ) monthly mortgage pre-payments and some principal pre-payments. By beginning ofXX/XX/XXXX, the principal balance was {$100000.00}. Around the first week of XX/XX/XXXX, I used Wells Fargo 's online interface to get a payoff estimate, with an anticipated payoff date of ~mid-XX/XX/XXXX. The website returned that I would be refunded ~ {$3600.00}, which seemed to make sense to me given an interest rate of 4.000 %.

On XX/XX/XXXX, I made a principal payment of {$50000.00}, resulting in a residual principal balance of {$50000.00} that remains unchanged as of today, XX/XX/XXXX.

About a week after that principal payment, I again used Wells Fargo 's online interface to get a payoff estimate, this time with an anticipated payoff date of ~XX/XX/XXXX. The website returned that I would be refunded ~ {$1800.00}, which implies a partial principal pre-payment would have forfeited my right to recover the corresponding pre-paid interest.

-- -- Inquiry Context : Several prior attempts through the CFPB as a conduit were made to shed light on Wells Fargos practice. On XX/XX/XXXX, I initiated an inquiry through the CPFB to gauge the impact of a potential future {$45000.00} principal pre-payment on a payoff estimate. Wells Fargo responded on XX/XX/XXXX. In its response letter, Wells Fargo stated " At this time, with the account being due for the XX/XX/XXXX, payment, and the payoff calculated through XX/XX/XXXX the overpayment of interest is {$490.00}. [ ... ] If you were to make a {$45000.00} principal payment as indicated in your inquiry, you would need to request an updated payoff statement at the time to determine the correct payoff amount. I'm sorry for any stress or aggravation this might have caused you. '' Above statements suggests : Wells Fargo understood the inquiry, however declined to disclose the impact of a partial principal payment on a payoff estimate, which I deem both unreasonable and further damaging.

A prior letter from Wells Fargo suggest they simply use " Unpaid Principle Balance '' ( UPB ) to calculate any required at the time of a payoff.

The CFPB provided a conduit for written communication, however whether any other supervisory action has been taken to date is unclear.

-- -- New request of Wells Fargo, to be answered point by point : 1. Assume I make a principal pre-payment of {$45000.00} on XX/XX/XXXX. What would be a likely payoff estimate calculated through XX/XX/XXXX, with an accuracy range of plus or minus 10 %?

2. If you decide not to provide an estimate as requested by point # 1, please explain why you are unable to do so, keeping in mind the intent of the inquiry ( i.e., plus or minus 10 % accuracy being acceptable ).

3. Using your historical records on the account, please provide an estimated payoff amount as of XX/XX/XXXX, calculated through XX/XX/XXXX.

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