Consumer complaint received 2020-05-01
Company: WELLS FARGO & COMPANY
State: MD
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
When we got our mortgage ( closed in XX/XX/XXXX ), we used Wells Fargo and we put 10 % down. We believe that the originator told us that whenever the loan reached 80 % LTV, we could have the PMI removed We were interested in this topic because we planned to make extra principal payments. We also believe that he said that, if 80 % LTV was reached in the first year, a new appraisal would be required. Not 100 % sure about these points as it's been almost a year, but we have refreshed ourselves on the origination documentation and there is clearly mention of the ability to remove the PMI with no age requirement In the same section of the origination documentation it mentions the loan balance must reach 80 % of the value of the home, that they will validate the value of the property and that you must have a good payment history ( they appear to indicate that is no 30 or 60 day past due payments ). 

We have made additional principal payments in the first 10 months of our loan. When we were at 80.9 % LTV ( mid-XX/XX/XXXX ), we contacted Wells Fargo and asked for more information about how to get the PMI removed and were told they'd send us a letter with the specific payment needed ( the loan had to be under 80 % LTV ) and " any additional requirements ''. It was at this time ( same day, I believe ) that we noted Wells Fargo took our PMI payment from our escrow account ( 5-8 days prior to the day of the month on which they had deducted it in any of the three months prior Were they trying to hurry up and disburse it so that if/when I met the requirements to have the PMI removed they wouldnt miss that money? ) We calculated the principal payment needed to bring our loan under 80 % LTV and we made the extra principal payment ( Wells Fargos website then showed us at 79.9 % LTV ). 

On XX/XX/XXXX, we were emailed a letter dated XX/XX/XXXX ( two weeks after our Mid-XX/XX/XXXX call to Wells Fargo, and several days after wed made the principal payment needed to bring our loan under 80 % LTV ) that stated we are also required to have an appraisal ( which we believe is not exactly consistent with what we were told at the time of origination ). When I called Wells Fargo to inquire about the apparent change in the appraisal requirement, I spoke to a woman who indicated she tried to remove the PMI in their system because wed reached 80 % LTV ( and apparently the investor permitted latitude in the appraisal requirement ), but then she told me that the loan also had to have existed for 24 months prior to getting the PMI removed. When I said that had not been a requirement stipulated in the mortgage origination documents I reviewed and that I wanted to initiate a complaint because Wells Fargo seemed to be changing the requirements, I was transferred to another XXXX rep. That XXXX rep told me that my loan had to have existed for 24 months, have a good payment history, and have an appraisal before ( and assuming appraisal didn't indicate a loss of value ) the PMI could be removed. This call ( today : XX/XX/XXXX) was the first time that I have heard about or am seeing any " seasoning '' requirement ( i.e., a requirement that I pay the PMI for at least 24 months, regardless of anything else ). I am unable to identify any mention of such a requirement in the origination documents. The employee who told me about the " seasoning '' requirement claimed to be reading a document that was in my origination file that said the loan had to have a " 24 month payment history '', but then seemed to have admitted that there was no such requirement after I pressed her on it - I told her I'd be contacting the CFBP about this. After enough runaround, that rep told me the only thing Id actually need to do in order to have the PMI removed was have an appraisal, so I tried to order one. At that time ( and at no time prior ) I was told that they haven't been doing any appraisals for months. When I inquired further, the rep told me that there had been no appraisals since more than a month prior to Wells Fargo telling me the requirements for removing PMI ( i.e., make an extra principal payment to reach 80 % LTV and have an appraisal )! The representative gave me various, inconsistent answers for why no appraisals were being done ( e.g., your safety [ as if appraisers have a lot of human contact, cant wear masks, etc. ] ) and at one point she cited some ambiguous government requirement/order When I pressed her on the specifics of the government order/requirement that stopped real estate appraisals, she could not provide any specifics and went back to a vague answer about the pandemic, safety, etc. 

It seems very deceptive to provide moving targets / inconsistent requirements for removal of PMI. It also seems very deceptive to advise people of requirements they have to fulfill without simultaneously telling them that those requirements can not actually be fulfilled ( and that Wells Fargo has no date when they will allow those other requirements requirements, which appear to be essential services in our state, according to multiple sources, to go forward again ). I've made extra principal payments based on Wells Fargo 's oral and written representations, but they have not been transparent about the requirements ( including availability of ) to have the PMI removed and I believe they have tried to change such rules unilaterally. Ive checked our Governors guidelines ( and guidance from The XX/XX/XXXX ) and firms supporting the financial services industry ( including appraisers ) are deemed essential and allowed to continue working. Moreover, multiple online sources indicate that Wells Fargo is allowing appraisals for new homes and refis to proceed in my county / state. So, it seems like when Wells Fargo stands to make money from an appraisal ( e.g., new loans ), they are ok to have them and agree they are essential, however, when Wells Fargo does not stand to benefit financially and its just about a consumer, they will stop appraisals ( and not even timely notify consumers ). 

I've initiated complaints with Wells Fargo, but they have not contacted me to resolve these issues.

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