Consumer complaint received 2016-08-24
Company: WELLS FARGO & COMPANY
State: CO
Product: Mortgage
Sub-product: Home equity loan or line of credit
Issue: Settlement process and costs

Complaint:
I am writing to ask your help obtaining disclosure of terms from Wells Fargo Bank ( WF ) on a HELOC..I 've written Wells Fargo 2 times CFPB once. Prior to the conversion date ( XXXX XXXX, XXXX ) Wells Fargo changed, without written authorization or written disclosure ( per 1026.20 ) either the Index or Margin, or both used to calculate Interest rate during Repayment Period. I am asking for full disclosure of that changed Index and Margin. 

WF has only disclosed an index rate which is not the Index, and the fixed interest rate of 6.35 % which is not the margin. This 6.35 % coincidentally, is significantly higher than the 5.1 % fixed interest rate disclosed in the original Equity Line with Flexibility Agreement as cited multiple times by WF. 

In a letter ( attached ) I asked XXXX very specific and direct questions. WF answered only one directly. Perhaps WF thinks my questions vague but come on WF this is mortgage banking 101. 

Question 1 ) What is the index used? 
Wells Fargo Answer was " the published index rate at that time was 3.25 % ''. A very deceptive answer per 12 CFR 1026.20 ( c ). I did not ask the index rate I asked for the Index. 

WF added the statement saying I agreed to an early repayment on XXXX, XXXX, XXXX but disregards my rescission letter sent XXXX XXXX, XXXX. Per 1026.40 ( f ) ( 3 ) ( iii ) and Subpart C 1026.20 ( c ) ( 2 ) ( ii ) a ; WF has provided NO written and signed agreement to that alleged claim. This disagreement is not part of this request for disclosure and I not asking for a response on this matter. It will be handled legally later. 

So to rephrase the question The index rate is tied to an Index, what is that Index? 

Question 2 ) What is the margin? 
WF cites a letter dated XXXX XXXX, XXXX ( attached ) stating they previously answered this question. That XXXX letters refers to the original Equity Line with Flexibility Agreement as their answer to this margin question. I agree the Agreement answers the Margin question, however WF is not using the agreed upon index or margin as they cited and refer to in the Agreement. The following table is detailed in the Equity Line with Flexibility Agreement. 

Outstanding Balances Margin added to Index Up to {$19000.00} 1.840 % {$20000.00} to {$49000.00} 1.590 % {$50000.00} and above 1.490 % WF answer " smells '' of deceptive business practices. WF claims a 3.25 % index rate and a fixed interest rate of 6.35 %. So is 6.35 % the Margin added the Index? Again, and as cited by WF in the attached letters, the Equity Line with Flexibility Agreement states the maximum allowed margin added to the index is 1.840 % for a fixed interest rate of 5.10 % ( assuming index rate of 3.25 % ). Yet Wells Fargo charges a fixed interest rate of 6.35 %. WF Cites the agreement but does not follow the Agreement terms. 

Question 3 ) Is this a Fixed or variable rate. 
WF answered that it is a fixed rate. WF cited the Equity Line with Flexibility Agreement to confirm that it is fixed. 



Wells Fargo is citing the Equity Line with Flexibility Agreement when it suits their needs for some answers but disregards that agreement when it suits their needs on other answers. Wells Fargo Bank benefits at my expense by charging me an additional $ XXXX to $ XXXX in interest. Wells Fargo change in terms significantly benefits the bank over the term of the loan XXXX XXXX XXXX XXXX XXXX XXXX, CO XXXX

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