Consumer complaint received 2023-02-03
Company: WELLS FARGO & COMPANY
State: NJ
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
I have a Wells Fargo Mortgage and I setup payment through there website where they automatically withdraw the payments every XXXX week plus additional funds towards the principal. What I noticed is that they dont apply the payment at the time of withdrawal, they put it in unapplied funds and when they get the second payment, they apply the funds. I contact them and they said this is their policy. I received a letter from them explaining the process see enclosed attachment. There are some fundamental mis-statements in their letter. 
1. We can conform that the benefits of the Bi-weekly payment option is that you do not incur additional interest while the funds remain in the unapplied funds account. This whole section in the letter is a complete lie, if I call them and ask them what the payoff is on the mortgage it changes daily based on the interest owed. This contradicts what they are claiming in the letter. 
2. They go on to state The date the payment is received or applied is not a factor in the amount of principal and interest due each month. This is clear not correct see enclosed document tips to pay off your mortgage faster from Wells Fargo it clearly lays out the interest savings by paying Bi-weekly. The letter provided by Wells Fargo contradicts their very own website enticing people to setup bi-weekly payments to save interest. Enclosed is the link to the document in Wells Fargo site XXXX XXXX XXXX XXXX. They claim in the letter that I was aware when setting up Bi-weekly payments that the payments would not be applied until the full amount of the monthly mortgage payment is made. To prove them wrong I have cancelled my Bi-weekly payment on the Wells Fargo website and then I re-established them. This time I took a screen shot of every page and all the terms, see enclosed. I also provide the confirmation emails from Wells Fargo I received. No where does it state bi-weekly payments will not be applied until the full amount is collected. 
In summary Wells Fargo is deceiving mortgage holder by advertising bi-weekly and other payment incentives to reduce interest when in fact it is a way for them to get a free loan in my case for XXXX weeks while charging me interest on my principal mortgage balance. Their advertisements and terms contradict of setting up bi-weekly payments for mortgages contradict what they claim after the fact. The terms of the Bi-weekly payment are clearly listed at the time of setup of the Bi-weekly payment on the Wells Fargo website, see enclosed screen shots. No where in the terms does it state what they are claiming. At best this is deceptive marketing practice on Wells Fargos part. 
I have also enclosed a statement that clearly shows how the payments are unapplied. 
I have also enclosed a conformation email of me setting up the new bi-weekly payments please so they cant say it has changed this was done on XX/XX/2023.

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