Consumer complaint received 2020-11-18
Company: WELLS FARGO & COMPANY
State: TX
Product: Mortgage
Sub-product: Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
Wells Fargo strikes again. 

In the complaint I submitted a couple of weeks ago, I mentioned that I was counting on using a personal Line of Credit I had established and maintained in perfect standing for over 8 years with Wells Fargo because Wells Fargo seriously messed up on a mortgage application for me. As a reminder, they yanked this LoC from me with no warning, no negotiation, and no half-measures, which has left me in a precarious situation financially. 

But that is a separate complaint. This complaint is about Wells Fargos original blunder, which is what put me in the situation where I needed to actually use the personal LoC I had paid annual fees to maintain for 8 years ( and used only once during that time ). 

I began applying for a mortgage with Wells Fargo in XXXX of this year. I had credit around 840 and {$400000.00} worth of equity in my duplex ( not to mention {$200000.00} worth of equity in another 4-plex ), so without making promises, of course Wells Fargo led me to believe that borrowing {$100000.00} on my house with a HELOC was not likely to present problems. 

I supplied all of the documentation they required and paid their appraisal fee, but after six weeks of my jumping through their hoops and their proceeding as if my mortgage was likely to happen, I received notification from them that the State of Texas does not allow HELOC mortgages on multi-family properties! In other words, the mortgage they led me to believe I was qualified for does not even exist in Texas : it is illegal! 

Based on the information they had given me six weeks prior, I began renovating my house as I had enough savings already in place to cover about 30 % of the projected budget. I realize it was my mistake to count my chickens before they hatched. However, I knew that with credit in the excellent classification and {$600000.00} equity in my paid-off houses, if something fell through with Wells Fargo, I would be able to get a mortgage elsewhere. Plus, I knew the {$35000.00} personal LoC with Wells Fargo, which, although it didnt have a great interest-rate, was there to cover me in case I needed it. 

Unfortunately, Wells Fargo didnt give me this crucial piece of information at the beginning of the application process that there was no such thing as a HELOC on a multi-family property. This information was, after all, available to them and was supposedly their area of expertise! As a result, I am in the homestretch of my renovation but with no finances to complete it. Once I complete it, I will get the rental income going again and be able to begin paying off my debts. Or I may sell the house, in which case I can pay off my debts quickly. Unfortunately, because Wells Fargo yanked my personal LoC, I am stuck - with only 10 days and {$10000.00} worth of work to do - unable to complete my project and get my property generating income again. This is particularly nerve-racking because in the meantime, I have financed my project with 0 % credit cards ( temporarily ), which has put a significant dent in my credit rating and made it all the more urgent that I get my income flowing again.

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