Consumer complaint received 2020-09-29
Company: WELLS FARGO & COMPANY
State: PA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
On XX/XX/XXXX, I received an escrow statement from my mortgage servicer ( Wells Fargo ) indicating that there was an anticipated shortage in my escrow account. This statement presented me with the option to either 1 ) pay the shortage over 12 months, or 2 ) pay the entire shortage amount as a lump sum. 

The escrow statement indicated that the anticipated shortage would occur in XX/XX/XXXX, but did not indicate that there was an anticipated deficiet. At the time, I was not familiar with the difference between a deficiency and a shortage, and so I was obviously quite distraught at the prospect of having to pay more on my mortgage each month, or having to come up with almost {$450.00} extra dollars to keep the increase from being as drastic ( please note, even paying the shortage amount apparently would still result in an increase, albeit not as drastic, in my monthly installment amount ). 

I called Wells Fargo and attempted to get a straight explanation of why my payment was going up when there did not appear to be an anticipated deficiency ( again, at the time I just understood that the escrow account was not actually going negative, but did not understand the difference between a shortage and a deficit ). Upon calling in, the representative was extremely unhelpful, and placed me on hold several times for long durations, sometimes with no explanation as to what she was doing that required a hold. Ultimately, she advised me that Wells Fargo could raise the payment amount due to the shortage, pursuant to " a law. '' When asked what law, the representative advised I would have to write Wells Fargo to get that information, and attempted to end the call by asking if I had further concerns. 

At this point, I was quite heated, as I could not imagine why I would have to " write in '' to get an explanation of what law was being referred to. Hence, I was asked to be transferred to a supervisor. Apparently ( per the supervisor 's own explanation ) the representative violated company policy and transferred me to the supervisor with no explanation of the conversation that had taken place prior. Consequently, I was forced to explain my grievances all over again. 

Fortunately, the long hold times had a silver lining, as in the interim I was able to determine the unspecified " law '' must have been Regulation XXXX. Unfortunately, even the supervisor clearly was not familiar with the law, as she was also totally unaware of what law was being referred to. While the supervisor was much more pleasant and personable, she was also not really able to help me. She basically said that unless I managed to find something in my origination paperwork that specified a " target balance '' lower than Wells Fargo 's standard, there was nothing that could be done. Not being familiar with Reg XXXX  herself, she did not explain it that way, but that was what she was trying to say, from context. 

After the call on XX/XX/XXXX, which lasted the better part of two hours thanks to various holds, I felt that I was basically left with no options. I lost some sleep that night trying to come up with a way to come up with {$450.00} dollars before XX/XX/XXXX, in order to keep my mortgage payment from increasing about 6 %, which will add strain to my familiy 's finances. 

Flash forward to today ( XX/XX/XXXX ), and by what I can only consider to be the most astounding of coincidences, I was reading the CFPB 's Summer XXXX Supervisory Highlights report. I work in the XXXX   XXXX  industry, and to be totally honest I otherwise would never have read it, but low and behold section XXXX describes, EXACTLY, the type of escrow statement I received from Wells Fargo. Given the fact the information in the report is anonymized, it may very well be that this is in fact the servicer being referenced, but I can not say for sure. Regardless, I am now aware I have received an illegal escrow statement, which specified options not actually legally available to me ( per Reg X ), and demand the situation be rectified. 

I realize that " option one, '' to spread the shortage out over twelve months, is apparently legal. That said, Reg XXXX also stipulates that the servicer can choose not to act with regards to the shortage, and keep my payment the same. And THAT, is what I would like Wells Fargo to do in this situation, given that the escrow statement indicates that there will be a shortage, and not an actual deficiency. 

In the event that my proposed remedy is not implemented, then in the alternate I will, despite the increased financial burden, have to pay the shortage over twelve months. However, in the event that is what occurs, I DEMAND that Wells Fargo keep me abreast of the changes they will ( and hopefully are already ) undertaking to ensure that they do not continue to harm consumers, such as myself, with their demonstrably illegal escrow statements. If that is the track that Wells Fargo chooses to take regarding this issue, I request reporting to myself at intervals no less than 90 days, until the issue is resolved. 

Thank you for your time.

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