Consumer complaint received 2020-12-28
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — 
Company: WELLS FARGO & COMPANY (MD)

Re : XXXX XXXX Property Address : XXXX XXXX  XXXX XXXX, XXXX  XXXX, Md XXXX FHA Case No. : XXXX XXXX : Wells Fargo I suffered a financial hardship in XXXX due to health issues and unemployment. Wells Fargo via its attorneys filed a foreclosure action on XX/XX/XXXX. However, Wells Fargo failed to issue to me the required face to face letter pursuant to the XX/XX/XXXX, Mortgagee Letter XXXX. I submitted to Wells Fargo an application for modification which Wells Fargo denied on XX/XX/XXXX. I appealed this denial as Wells Fargo failed to provide the specific reason each modification option was denied and failed to provide an NPV report as the denial was purported to be based upon income. 
As the legal process was playing out, I reached out to Wells Fargo again in XX/XX/XXXX in an effort to save my home and Wells Fargo agreed to review me for a loan modification. Once again Wells Fargo denied me for a loan modification claiming my income was {$5100.00} when in fact my income was much higher. I am self-employed and provided my Profit and Loss statements as well as all of my bank statements. All of which reflected an income of twice that claimed by Wells Fargo. Wells Fargo has refused to provide any documentation as to how it calculated my income. I appealed the denial. That appeal is attached along with the complete RMA and documentation as to income. The details of my appeal are as follows : The denial letter does not state the name of the investor or if there are any investor restrictions that prevented Wells Fargo from modifying my loan. Without this information, my ability to properly utilize my appeal rights under RESPA are substantially limited. Nevertheless, XXXX XXXX denial of my application is an error as I do qualify for loan modification. 

The Denial Letter states that I was denied for the FHA HAMP Loan Modification and Repayment Plan because : Based on the documentation you provided, we are unable to create an affordable mortgage payment that still meets the requirements of the program. We reached this decision by reviewing your monthly income, which is calculated as {$5100.00}, along with reviewing the other information you provided. 

There is no explanation as to how my income was calculated as {$5100.00} per month or what documents or time period that was based off of. 

On XX/XX/XXXX, I submitted to Wells Fargo an updated RMA and P & L with supporting bank statements. Pursuant to the documents, my income from the XX/XX/XXXX XX/XX/XXXX P & L was as follows : Real Estate {$21000.00} Catering {$3000.00} {$24000.00} divided by 3 months = {$8200.00} per month. 
However, Wells Fargo did not make a decision at that time and requested that I continue to submit my bank statements and other documents and on XX/XX/XXXX, I submitted an updated P & L. Pursuant to the XXXX P & L, my income from XXXX was as follows : Real Estate {$49000.00} Catering {$13000.00} {$63000.00} divided by 6 months = {$10000.00} Under FHA HAMP, a payment is affordable if it can reach 31 % or less of a borrowers income. 31 % of XXXX = {$3200.00}. As I am without the actual inputs, below I have provided are best estimates that show why I should have easily qualified based on the income in my XX/XX/XXXX P & L. Below is the summary of a modification based on the assumed total amount modified unpaid principal of {$490000.00} and an interest rate of 2.45 % ( interest at that time https : XXXX ) amortized over 30 years. 
Summary Principal borrowed : {$490000.00} Regular Payment amount : {$1900.00} Final Balloon Payment : {$0.00} Interest-only payment : {$1000.00} *Total Repaid : {$690000.00} *Total Interest Paid : {$200000.00} Annual Payments : 12 Total Payments : 360 ( 30.00 years ) Annual interest rate : 2.45 % Periodic interest rate : 0.2042 % Debt Service Constant : 4.7103 % *Total interest paid as a percentage of Principal : 41.310 % This calculation shows that the total principal, interest, taxes, and insurance payment would have been {$2400.00} which is less than the {$3200.00} ceiling of 31 % of his income. In addition, I had submitted with this appeal an updated P & L year to date for my real estate business with supporting documentation and bank statements. My income year to date is as follows : Real Estate {$100000.00} Catering {$13000.00} {$110000.00} divided by 10.5 months = {$11000.00} 31 % of {$11000.00} = {$3400.00}. Thus, I should be approved if the modified monthly payment is less than {$3400.00}. Below is the summary of a modification based on the assumed total amount modified unpaid principal of {$490000.00} and an interest rate of 2.283 % ( interest at that time https : XXXX ) amortized over 30 years. 
Summary Principal borrowed : {$490000.00} Regular Payment amount : {$1800.00} Final Balloon Payment : {$0.00} Interest-only payment : {$930.00} *Total Repaid : {$670000.00} *Total Interest Paid : {$180000.00} Annual Payments : 12 Total Payments : 360 ( 30.00 years ) Annual interest rate : 2.28 % Periodic interest rate : 0.1903 % Debt Service Constant : 4.6072 % *Total interest paid as a percentage of Principal : 38.215 % This calculation shows that the total principal, interest, taxes, and insurance payment would have been {$2400.00} which is less than the {$3400.00} ceiling of 31 % of his income. As such, the denial for a modification under the FHA HAMP Program is incorrect as I can achieve a monthly payment equal to or less than 31 % of my documented income. 
Even if Wells Fargo were correct in its income calculation, which I emphatically state those calculations are incorrect, I would still qualify for a loan modification if Wells Fargo utilized a partial claim as allowed up to 30 % of the unpaid principal balance pursuant to FHA-HAMP guidelines. 
FHA has publicly stated that it is working aggressively to halt and reverse the losses represented by foreclosure. While FHA offers a number of various loss mitigation programs including FHA-HAMP, those programs are only as successful as the servicers handling the accounts. 
Wells Fargo has mishandled my case from the beginning by failing to issue the required Face to Face letter. Wells Fargo continues to deny me for a loan modification despite the fact that I have provided income documentation that demonstrates more than double the income that Wells Fargo claims. 
Wells Fargos reputation to cause financial harm to borrowers is well evidenced to include the unprecedented move XX/XX/XXXX, by the Federal Reserve to punish Wells Fargo by not allowing it to grow its assets until the bank cleans up its act. To date the Federal Reserve has not lifted that cap. Wells Fargo is harming not just me, but FHA by causing another foreclose loss when the reality is I can sustain homeownership by making my mortgage payment if only Wells Fargo would allow me to do so. 

Here is a link to a copy of my appeal : file : ///C : XXXX % XXXX % XXXX % XXXX % XXXX % XXXX % XXXX % XXXX % XXXX