Consumer complaint received 2018-08-04
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: WELLS FARGO & COMPANY (NY)

Ask of Wells Fargo : 1. Elaborate on Companys claim that any pre-paid finance charge would be non-refundable and provide documentation substantiating basis, if any, for said Company claim.

2. Clarify where, if anywhere during mortgage servicing customer operations, Company alerts consumer that any pre-paid finance charge may be non-refundable. 
-- - Ask of United States Government Appointee ( CFPB or DFS ) : a ) Determine whether additional consumer protection from Wells Fargo is required. Specifically, a competing mortgage servicer like XXXX XXXX Bank appears to prevent consumers from pre-paying more than one mortgage installment, whereas Wells Fargo does not. 
b ) Determine whether Wells Fargo current mortgage service practice is misleading c ) Determine whether Wells Fargo should be fined for any misleading in its current practice. 
d ) Determine whether Wells Fargo should be required to provide compensation to impacted consumers for its current mortgage service practice. 
-- - Rhetorical Question : Why would anyone offer to pre-pay any non-refundable finance charge? 
-- -- Matter Requiring Attention : Alleged unethical treatment of principal pre-payments when monthly mortgage pre-payments were made. 
-- -- Situation : In early to mid-XX/XX/XXXX, I made ( 11 ) monthly mortgage pre-payments and some principal pre-payments. By beginning of XX/XX/XXXX, the principal balance was {$100000.00}. Around the first week of XX/XX/XXXX, I used Wells Fargo 's online interface to get a payoff estimate, with an anticipated payoff date of ~mid-XX/XX/XXXX. The website returned that I would be refunded ~ {$3600.00}, which seemed to make sense to me given an interest rate of 4.000 %. 
On XX/XX/XXXX, I made a principal payment of {$50000.00}, resulting in a residual principal balance of {$50000.00} that remains unchanged as of today, XX/XX/XXXX. 
About a week after that principal payment, I again used Wells Fargo 's online interface to get a payoff estimate, this time with an anticipated payoff date of ~XX/XX/XXXX. The website returned that I would be refunded ~ {$1800.00}, which implies a partial principal pre-payment would have forfeited my right to recover the corresponding pre-paid interest. 
-- -- Inquiry Context : Several prior attempts through the CFPB as a conduit were made to shed light on Wells Fargos practice. 
On XX/XX/XXXX, Company stated, Any refund you receive following a payoff would be for any over payment [ sic ] of the payoff and any remaining funds in your escrow account. [ ] You receive a credit for any interest you have paid in advance beyond the payoff date, which decreases your payoff amount. [ ] There is no benefit for having paid the loan ahead when you pay off the loan. 
On XX/XX/XXXX, I initiated an inquiry through the CPFB to gauge the impact of a potential future {$45000.00} principal pre-payment on a payoff estimate. Wells Fargo responded on XX/XX/XXXX. In its response letter, Wells Fargo stated " At this time, with the account being due for the XX/XX/XXXX, payment, and the payoff calculated through XX/XX/XXXX, the overpayment of interest is {$490.00}. [ ... ] If you were to make a {$45000.00} principal payment as indicated in your inquiry, you would need to request an updated payoff statement at the time to determine the correct payoff amount. I'm sorry for any stress or aggravation this might have caused you. '' Above statements suggests : Wells Fargo understood the inquiry, however declined to disclose the impact of a partial principal payment on a payoff estimate, which I deem both unreasonable and further damaging. 
A prior letter from Wells Fargo suggest they simply use " Unpaid Principle Balance '' ( UPB ) to calculate any required at the time of a payoff. 
The CFPB provided a conduit for written communication, however whether any other supervisory action has been taken to date is unclear.