Consumer complaint received 2023-09-26
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: WELLS FARGO & COMPANY (FL)

I am reopening the complaint XXXX since it was not properly addressed and Wells Fargo, in their response to my original, continues to use the term minimum reserve when the two-month reserve is actually the maximum they can require. Without telling me why they require the maximum reserve allowed in my account. 


Subject: Escalation to the CPFB of Escrow Account Concern -
Response Clarification Dear Wells Fargo Home Mortgage and CFPB
officers, I hope this message finds you well. I am writing in response to
your recent communication regarding my concerns about the significant
increase in my escrow account, as well as the addition of a new twomonth escrow reserve. First and foremost, I would like to thank you for
providing me with additional details regarding the breakdown of the
escrow increase, as outlined in your analysis on Page 2, Part 2 of Wells
Fargo XXXX XXXX. It is evident that the increase of XXXX
comprises two distinct components: XXXX for the estimated increase in
tax and insurance and an entirely new XXXXXXXX minimum escrow
balance equivalent to two months of escrow payments. While I
appreciate the clarification on the first component related to tax and
insurance, I would like to emphasize that the primary focus of my initial
complaint centered on the addition of the new XXXX two-month
escrow cushion/reserve. Unfortunately, your response did not address
this critical concern. Regarding the tax and insurance component, based
on your explanation, the escrow increase should have amounted to
XXXX XXXX XXXX. However, the actual increase I
experienced was XXXX, signifying a substantial discrepancy. What
deeply concerns me is the addition of the new XXXX two-month
escrow cushion/reserve. This matter raises serious questions and warrants
further investigation for the following reasons: 1A) Your response to the
CPFB did not directly address why this two-month escrow cushion was
added at this time, merely acknowledging my concern about it. 1B) The
original customer service contact on XXXX mislead me to believe
the 2 month additional reserve was a mandatory NJ law requirement and
XXXX, XXXX XXXX Complaint Detail
https://portal.consumerfinance.gov/consumer/s/complaint-XXXX XXXX
not a Maximum allowed by NJ. 2) In the current high-interest rate
environment, customers face limitations in switching to other lenders,
potentially placing them in a vulnerable position, which may be
exploited. 3) While New Jersey laws permit such a two-month cushion, it
is unlikely that Wells Fargo currently requires these funds for any
immediate purposes. This is akin to raising a deposit account's minimum
balance from a few hundred dollars to XXXX. However, it's important
to note that the costs associated with switching my mortgage to another
bank are currently prohibitively high. 4) As an individual with a
background in compliance for financial services and an MS in
Accounting, I can attest that the average person may find it challenging to
comprehend the intricacies of these calculations, rendering them more
susceptible to abusive practices. 5) There appears to be a discriminatory
practice against existing customers, as it is likely that Wells Fargo will not
impose this two-month reserve requirement on new mortgages to remain
competitive in the market for new mortgages, creating an inequitable
situation. Effectively, this additional unjustified reserve of XXXX
implies that Wells Fargo will profit from the interest earned on this
amount while providing no compensation to the customer. It is akin to
maintaining an account with a minimum balance of XXXX, where the
bank pays no interest to the account holder. To resolve this issue
satisfactorily, I kindly request the removal of the additional XXXX
reserve from your analysis, as it appears unjustified by any current cash
flow payments out of the escrow account. I believe that this adjustment is
necessary to rectify the situation and align it with fair and transparent
banking practices. I appreciate your prompt attention to this matter and
look forward to a resolution that ensures equity and compliance with
relevant market conduct expectations and regulations. Sincerely, XXXX XXXX