Consumer complaint received 2017-02-26
Product: Mortgage — Conventional adjustable mortgage (ARM)
Issue: Application, originator, mortgage broker — 
Company: WELLS FARGO & COMPANY (NJ)

We applied for a mortgage on a property located one town due east and a distance of XXXX miles away from our primary residence. Our intention, which we disclosed to Wells Fargo Home Mortgage ( WFHM ), was to retain our primary residence and to rent out the property for which the new mortgage was being applied. At some point, we would demolish the structure on the property and build a new primary residence. We received a mortgage commitment from WFHM for the property. Shortly thereafter, we received notice of a very large Federal and state tax payment, as well as significantly larger estimated payments for the coming year. We disclosed the new liabilities to WFHM, including the fact that after a down payment and several quarterly estimated payments, we would essentially reduce our capital position to zero. However, WFHM somehow still argued that we could afford this other property, despite our pleading that it was not a wise decision. As a result of WFHM 's inability to issue a denial letter, the sellers disputed our exit from the transaction, settling with us for {$20000.00}. Upon further review of our loan application, we noted that, for some reason, our loan had been applied for as a " secondary residence '' loan, instead of as an " investment property. '' WFHM furnished us with definitions of both. Our intended use of the property very clearly comported with the definition of an investment property. In fact, the sales consultant who assisted us noted that investment properties carrier higher interest rates and larger down payments to offset the additional risk to the bank. In early conversations with said sales consultant, she noted she hoped for an underwriter located far from New Jersey so that the underwriter would not realize how close the properties were located to each other. She also informed a Wells Fargo relative of ours that she was not going to inform underwriting of the fact that we intended to rent the property. As a result, the application was processed as a secondary residence. We argue that the application should have been processed as an investment property. More importantly, had it been, we would have been provided with more accurate information as to interest rate and down payment, information that would have been materially different from that required under a secondary residence - information that may have had an impact on our decision making. Our decision to enter the contract was based upon inaccurate information. We were not given the chance to consider the economics of the transaction had it been processed, accurately, as an investment property. We took steps to understand how/why WFHM processed the application as a secondary residence but, to date, have been unable to do so. The initial sales consultant will not answer any of our questions. An e-mail to her supervisor went unanswered. We lost {$20000.00} in this transaction, and WFHM can not simply find it convenient enough to answer a very simple question. We believe this application was knowingly processed incorrectly to increase the chance of the loan closing.