Consumer complaint received 2018-04-27
Company: WELLS FARGO & COMPANY
State: KS
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
Improper Rejection of Refinance Due to Rise in Interest Rates In 2016 thirty year mortgage interest rates continued to fall. I applied for another refinance with Wells Fargo, this time at my cost. The preliminary application, which required not only submission of the prior three years tax filings, but also the answering of specific detailed questions regarding my income and the production of brokerage statements indicating dividend payments, prior to approval. I locked in a thirty year rate of 3.375 %. The underwriter approved the application, having seen all the relevant documentation and detailed information regarding income, taxes, capital gains and losses for the past three years plus one year prior ( due to the previous refinance ), and having had the opportunity to ask further questions if necessary. Because of the pre-approval, I approved an appraisal by a Wells Fargo subcontractor, at a cost to me of almost {$500.00}. The appraisal figure was as expected and adequate to support the refinance. Interest rates shot back up. Suddenly my application was rejected allegedly due to Excessive obligations in relation to income. Given the underwriter had already seen all that information and previously approved it, given the figures were better than those I gave over the phone in the pre-application, and given they were all better than those upon which the prior application was approved, this was not possibly the real reason for the rejection. After phone calls and letters Wells Fargo took the position that I had experienced excessive business losses. I responded first that I had experienced larger business losses in the prior year, after which the Wells Fargo initiated refinance was approved, and second that in each year I simply took some capital gains to cover what was required, given I had liquid assets of several times the amount of the mortgage in question. Wells Fargo responded to this by arguing that I was not allowed to consider the capital gains as they were already netted into my adjusted gross income on my tax returns, to which I responded that the same was true of the business losses those losses dont even appear in adjusted gross income, they were netted in each year, and it was only the net result, only the adjusted gross income that Wells Fargo used in the first refinance ( and each financing prior to that one ) as well as in the one that was rejected. In short, they were going back into the return and cherry picking for excuses where theyd never even looked when they processed the application. In any event, Wells Fargo states there is an underwriters decision which was made in rejecting the application based on Excessive obligations in relation to income and they have this in their computer. However, they claim they can not offer that data, or a screen shot, to me but of course they can give it to CFPB. CFPB can see this information which Wells Fargo claims exists and supports their position, and CFPB can know for certain whether Wells Fargo is telling the truth or whether they have rejected previously accepted refinance applications due to a shift in interest rates, after having locked them in. I did lose the opportunity to refinance with XXXX, and I have lost just under {$500.00} in the appraisal fee, along with a great deal of time. What is more important is that CFPB review the information and ascertain whether this is a freak incident or whether it is one more way in which Wells Fargo practices sophisticated organization crime hidden in the blind of regulatory defenses and given their incredibly disproportionate leverage. If CFPB reviews these alleged notes and verifies that Wells Fargo has at a minimum properly documented that Excessive obligations in relation to income was the true reason given by the underwriter, however misguided and absurd it may be, I will fully and finally that determination. If such documentation does not exist, again, a full investigation is in order.

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