Consumer complaint received 2023-03-21
Company: WELLS FARGO & COMPANY
State: NY
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Struggling to pay mortgage

Complaint:
XXXX XXXX XXXX  Mandatory settlement conference in residential foreclosure actions : My complaint here with Wells Fargo has to do with ; 1 ) XXXX XXXX, Court held a mandatory settlement conference in which Wells Fargo did not act in good faith in negotiations and improperly denied me a mortgage loan modification. 
2 ) Wells Fargo unauthorized charges ( fees ) to my monthly mortgage payments. 

XXXX ) CPLR XXXX - I obtained a Home Mortgage from Wells Fargo in XXXX XXXX, XXXX. Wells Fargo claimed I failed to make my XX/XX/XXXX payment and every payment thereafter. At this point Wells Fargo started the process of foreclosure on me. Wells Fargo assigned the mortgage to XXXXXXXX XXXX on XX/XX/XXXX and Wells Fargo became the Mortgage Loan Servicer. 

XXXXXXXX XXXX started Foreclosure proceedings against me on XX/XX/XXXX and receive Summary Judgment XX/XX/XXXX. 

After my attorney answered the Foreclosure complaint on XX/XX/XXXX and the next process was the Court held a mandatory settlement conference per XXXX XXXXXXXX which was held approximately XX/XX/XXXX through XX/XX/XXXX per court records but actually went into early XXXX. 

When I submitted my first HAMP application, Wells Fargo was using my income for the 1st quarter of XXXX, XXXX & XX/XX/XXXX, averaging it out and times it by 4 quarters to get an average yearly monthly income. My attorney explained to Wells Fargo, since I had a Painting Contracting business, this 1st quarter period is during the winter and the slowest income period for my business. Typically, XXXX XXXX are the slowest work period. 

During this time Wells Fargo submitted to my attorney my monthly average income and a Mortgage Modification Proposal that lowered the principal owed, reduced the interest rate and extended the mortgage to a 40 year. In this proposal, Wells Fargo showed my prior mortgage payment broken down by principal including interest, property taxes and insurance. The new proposed monthly mortgage payment was broken down the same way, principal/w interest, property taxes and insurance. 

Now at the time in reading theses documents, I see Wells Fargo has added an unauthorized charge ( fee ) to my monthly mortgage payment in insurance of {$130.00}. This is the basis of my # 2 complaint above ; 2 ) Wells Fargo unauthorized charges ( fees ) to my monthly mortgage payments. 

Wells Fargo got back to my attorney saying the Mortgage Modification was denied due to was the proposed modified monthly payment amount would be more than the HAMP guidelines ( could the unauthorized Insurance Fee added to the error in denial? ). My attorney responded back saying Wells Fargos that there was an error in their calculations. My attorney wrote that my gross monthly income ( using the average of first 3 months of income ) and using the proposed mortgage modification that Wells Fargo purposed, the income did fit the HAMP guidelines and asked them to please go over there figures again since the denial did not correspond to the information Wells Fargo provided. Wells Fargo responded again saying I did not qualify based on their calculations. At this time, it was around XX/XX/XXXX where we resubmitted my income since I was now in my prime income season. With my new income more than doubling Wells Fargos previous calculated monthly income, I more than qualified with the HAMP guidelines. At the end of XXXX Wells Fargo responded back that I was reviewed for modification and was informed I was denied again but this time due to that XXXXXXXX XXXX does not offer modifications. 

Why would Wells Fargo go through this entire process of 10 months, proposing to me a new monthly mortgage modification, then come up with XXXXe doesnt offer modifications? Why did Wells Fargo put me through this? 

Even though I was denied due to XXXX XXXX does not offer modifications, Wells Fargo did participate in the HAMP program. Wells Fargo reviewed the loan for a HAMP modification through themselves but again I was denied due to insufficient income. Again, could the unauthorized Insurance Fee added to the monthly mortgage payment adding to the payment be part of the error in denial?

Wells Fargos own attorney asked Wells Fargo and XXXX to reconsider their decision, but was denied again. 

How is it possible that Wells Fargo is denying based on insufficient income? The first denial was based on my 1st quarter income where my attorney correctly showed Wells Fargos Calculations are in error and incorrect. Now showing my income in XX/XX/XXXX which more than double my 1st quarter income and Wells Fargo again in error is denying the mortgage modification. Wells Fargos own Attorney in seeing the calculations asked Wells Fargo and XXXX to reconsider. Why would their own Attorney, who Wells Fargo refers to as ( mediation counsel ) agree with my Attorney and ask his paying client to reconsider? 

I believe through documents between Wells Fargo and my attorney, my attorney and Wells Fargos attorney ( mediation counsel ) that the calculations Wells Fargo used was in error as my attorney responded to them and explained, furthermore when I showed a drastic increase in my income later in the year, I was still denied. Why early in the negotiations did Wells Fargo provide a proposed mortgage modification showing all the changes in the new mortgage with the New purposed mortgage payment amount if XXXX XXXX does not offer modifications? After being informed about XXXXXXXX XXXX, Wells Fargo ( who does participate in the HAMP program ) denied the modification again under insufficient income where my attorney clearly showed I did qualify under HAMP Guidelines. At this time, Wells Fargos Own Attorney Mediation Counsel asked XXXX and Wells Fargo to reconsider but got denied. Im pretty sure Wells Fargos Mediation Counsel is aware of the HAMP guidelines in which the reason he asked for them to reconsider.

Through previous law suits in which Wells Fargo has been charged multiple times for Denying mortgage holders Mortgage Modifications due to an error in its automated software for calculating whether a borrower should be offered more favorable loan terms in lieu of foreclosure I believe I was affected by this error in their software glitch and denied the mortgage modification.

In previous lawsuits ; Wells Fargo said the computer error affected " certain accounts '' that were undergoing the foreclosure process between XX/XX/XXXX and XX/XX/XXXX Wells Fargo 's underwriting tool had miscalculated whether homeowners were eligible for the Home Affordable Modification Program or other government programs designed to help people remain in their homes despite difficulty making payments. Because of the glitch, around XXXX Wells Fargo customers either were improperly denied mortgage modifications or were not informed they could qualify to have their loan terms modified. 

Wells Fargo entered the US Government HAMP program and had received a total of {$1.00} XXXX in HAMP incentive payments from the U.S. government by summer XXXX, becoming one of the four largest HAMP servicers. Just 17.5 % of the HAMP incentives Wells Fargo received went to homeowners with the remainder going to investors and the servicer. Homeowners who benefited were in the minority, as Wells Fargo denied close to 60 % of requested HAMP mortgage modifications.

Please also see below Previous Lawsuits Due to Wells Fargos unjustly denying Mortgage Modification 2 ) Wells Fargo unauthorized charges ( fees ) to my monthly mortgage payments. " As well they may have been charged incorrect fees and other costs. '' Now in reviewing correspondence between Wells Fargo and my attorney, I see Wells Fargo was charging me for Home Insurance in the amount of {$130.00} in my mortgage payment plus the fee included of an interest rate of 6.875 % per month. 

From the First day I received my mortgage on XX/XX/XXXX from XXXX, I had House insurance through XXXX XXXX policy # XXXX XXXX, which I can prove. I refinanced with Wells Fargo on XX/XX/XXXX, Wells Fargo never informed me they were going to apply a fee for House insurance to my Mortgage Payment. Since XX/XX/XXXX XXXX has always insured my house under the same policy number and I have never been late or missed a payment since it is a automatic withdrawal. As per my Mortgage agreement # 5 Borrowers Obligation to Maintain Hazard Insurance or Property Insurance. I will obtain hazard or property insurance to cover all buildings and other improvements that now are, or in the future will be, located on the Property. The insurance will cover loss or damage caused by fire, hazards normally covered by Extended Coverage hazard insurance policies, and any other hazards for which Lender requires coverage, including, but not limited to earthquakes and floods. The insurance will be in the amounts ( including, but not limited to, deductible levels ) and for the periods of time required by Lender. Ect Wells Fargo illegally and unjustly added an unauthorized charge or fee to my monthly mortgage payments in the amount of {$130.00} plus interest. Wells Fargo Never notified me they were charging the fee or they were paying for the house insurance. {$130.00} fee x 6.875 % interest rate comes out to a charge of {$130.00} per month in unauthorized charges.

For the first year of the Mortgage with Wells Fargo in XXXX there were 10 months remaining for a total year cost of {$1300.00} in insurance. For the 12 months in XXXX the yearly fee is {$1600.00} for insurance. From XXXX XXXX the total paid is {$8300.00} for insurance, add in XXXX and the Total during this period paid to Wells Fargo in unauthorized charges ( fees ) is {$9700.00} for insurance.

If this {$9700.00} was applied to my mortgage payments it is equals to about 3 months in mortgage payments and thereby not making me In Default of my Mortgage. Due to Wells Fargos actions in charging an unauthorized charges ( fees ) would not have put me into default situation according to Wells Fargos records and Foreclosure proceedings filed against me. 
Wells Fargo engaged in unfair acts and practices in violation of 1036 ( a ) ( 1 ) ( B ) and 1031 ( c ) ( 1 ) of the CFPA. 12 U.S.C. 5536 ( a ) ( 1 ) ( B ), 5531 ( c ) ( 1 ). Per CFPB law suit # 28, # 29, by assessing me unwarranted charges and fees Conclusion : XXXX XXXX XXXX XXXX Court held a mandatory settlement conference in which Wells Fargo did not act in good faith in negotiations and improperly denied me a mortgage loan modification. Due to an error in Wells Fargos Software Glitch they in error denied me a mortgage modification as argued by my attorney and as by Wells Fargos own Attorney Mediation Counsel asking XXXX and Wells Fargo to reconsider their denials. 

XXXX ) Wells Fargo unauthorized charges ( fees ) to my monthly mortgage payments. In adding an unauthorized charge in my monthly mortgage payments for Insurance in the amount of {$130.00} plus interest. In doing so, Wells Fargo collected an additional {$9700.00} in unauthorized fees which would, according to Wells Fargos records put me into default and into Foreclosures Proceedings. Wells Fargo engaged in unfair acts and practices in violation of 1036 ( a ) ( 1 ) ( B ) and 1031 ( c ) ( 1 ) of the CFPA. 12 U.S.C. 5536 ( a ) ( 1 ) ( B ), 5531 ( c ) ( 1 ).

Previous Lawsuits Due to Wells Fargos unjustly denying Mortgage Modification due to an error in their software used to compute : As per CFPB lawsuit " Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating federal consumer financial laws, including by engaging in unfair, deceptive, or abusive acts or practices. The CFPBs investigation found that Wells Fargo violated the Acts prohibition on unfair and deceptive acts and practices. Consumers were illegally assessed fees and interest charges on auto and mortgage loans. Some mortgage loan borrowers may be eligible for damages whose requests for modifications to their loan to avoid foreclosure were unfairly turned down. As well they may have been charged incorrect fees and other costs. Customers may be eligible for damage payments for wrongful foreclosures or reporting errors that resulted in loan applications being denied when they should have been approved.

The CFPB order requires Wells Fargo to : " Provide more than {$2.00} XXXX in redress to consumers : Wells Fargo will be required to pay redress totaling more than {$2.00} XXXX to harmed customers. These payments represent refunds of wrongful fees and other charges and compensation for a variety of harms such as frozen bank accounts, illegally repossessed vehicles, and wrongfully foreclosed homes. '' UNITED STATES OF AMERICA CONSUMER FINANCIAL PROTECTION BUREAU CONSENT ORDER Filled XX/XX/XXXX XXXX. The following definitions apply to this Consent Order : h. Related Consumer Action means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Respondent based on substantially the same facts as described in Section IV of this Consent Order.

Mortgage Servicing Acts and Practices 23. Respondent has incorrectly denied mortgage loan modification applications and miscalculated fees and other charges for thousands of mortgage borrowers, as set forth below, resulting in at least {$190.00} XXXX in remediation being paid to affected mortgage borrowers. Some of these failures were the result of software errors that persisted for multiple years. 
XXXX. Respondents mortgage servicing operations experienced other errors that resulted in Respondent assessing borrowers unwarranted charges and fees in various situations 28. Section 1036 ( a ) ( 1 ) ( B ) of the CFPA prohibits unfair, deceptive, or abusive acts or practices. 12 U.S.C. 5536 ( a ) ( 1 ) ( B ). An act or practice is unfair if it causes or is likely to cause consumers substantial injury that is not reasonably avoidable and if the substantial injury is not outweighed by countervailing benefits to consumers or to competition. 12 U.S.C. 5531 ( c ) ( 1 ).

29. Respondents acts and practices described in paragraphs 23 through 27 caused substantial injury to consumers that was not reasonably avoidable or outweighed by any countervailing benefit to consumers or to competition 30. Thus, Respondent engaged in unfair acts and practices in violation of 1036 ( a ) ( 1 ) ( B ) and 1031 ( c ) ( 1 ) of the CFPA. 12 U.S.C. 5536 ( a ) ( 1 ) ( B ), 5531 ( c ) ( 1 ).

As per SEC - A quarterly filing with the Securities & Exchange Commission in August 2018 revealed that Wells Fargo made an error in denying mortgage modifications to hundreds of borrowers. The securities filing says that Wells Fargo discovered a calculation error in its automated software for calculating whether a borrower should be offered more favorable loan terms in lieu of foreclosure. Wells Fargo says the error affected XXXX homes that were in the foreclosure process between XX/XX/XXXX, and XX/XX/XXXX. 
As Wells Fargo explains, two federal government programs require Wells Fargo and other lenders to offer loan modifications to keep people in their homes when they are in default, rather than going through the expensive process of foreclosure. Wells Fargo did not comply with this law, it says, due to a software glitch that affected XXXX mortgages that were in default. Ultimately, XXXX homes were foreclosed on, when a mortgage modification should have been offered, according to Wells Fargos own disclosures. 

In another case On XX/XX/XXXX, XXXX XXXX XXXX approved an {$18.00} XXXX settlement for the class. Throughout the case, Wells Fargo admitted that it should have offered these borrowers a mortgage modification, but the bank denied violating any laws and the case came close to trial. The class action lawsuit we filed alleges that Wells Fargo failed to implement and maintain the proper software and protocols to correctly determine whether a mortgage modification was required under federal regulations. The lawsuit also alleges that Wells Fargo knew of the error in XXXX but failed to disclose it for nearly three years. The complaint concludes that Wells Fargo acted negligently in denying loan modifications to hundreds of borrowers, at a time they were struggling, and failed to uphold its duty under the Home Affordable Housing Program ( HAMP ) to issue modifications to all troubled homeowners who qualified.

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