Consumer complaint received 2019-12-19
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: WELLS FARGO & COMPANY (CA)

Me and my partner own a property and have the mortgage with Wells Fargo Home Mortgage. It is a FHA 30 yr fixed loan that we closed in XXXX XXXX. I contacted their Mortgage Insurance Premium office in XX/XX/XXXX to find out if we could remove our MIP since we completely renovated the property and it now appraises for twice of what we originally paid for it. They said that we could not use an appraisal at that time to remove the MIP because they were insisting that we must make a minimum of 5 years of MIP payments and also reduce the principal loan balance down to 78 % LTV. They told me that we could send extra payments to lower the principal ... otherwise out LTV would not reach 78 % until XX/XX/XXXX. I asked for all of this in writing and the sent me a letter regarding this. 

After sitting down and doing the math, we figured the soonest we could remove it was in XX/XX/XXXX. As it got closer to that date, I contacted that MIP department again to see if we continued to make an additional {$360.00} payment along with our regular mortgage payment when could we reach the 78 % LTV. The lady I spoke to, XXXX XXXX, said she would run me an amortization schedule calculating that additional {$360.00} principal payment each month and mail it to me. The letter she sent me is dated XX/XX/XXXX that explains all the terms that we must meet to remove the MIP as we discussed on the phone. ( NO WHERE IN THIS LETTER OR ON THE PHONE WAS I TOLD THAT I HAD TO CONTACT THEM AND ASK FOR THE MIP TO BE REMOVED! ) This is not our first property, I'm a realtor and between my partner and me we have owned several properties. Of course most are purchased with a conventional loan that have no MIP, but over the years a few have been bought with FHA loans. Mortgages are something that we both know more than the average person, not to mention we both are very good with our finances and pay all our monthly bills at least one month ahead of time. Of course that was another requirement with Wells Fargo, you could not have any 30 days past-due payments in the last 12 months. This would never be an issue with us! 

We stuck with our plan to continue to make an extra principal payment of {$360.00} each month hoping that the MIP would be removed from our mortgage statement once we reached the 78 % LTV of {$260000.00}. This happened in XX/XX/XXXX, for our XX/XX/XXXX payment. Since we always paid a month or more early Wells Fargo knew on XX/XX/XXXX when they sent us our XX/XX/XXXX statement in the mail that our principal balance due {$260000.00} which is clearly below the 78 % LTV. That XXXX statement all the way thru to our XXXX  statement they still kept charging us for the MIP. They did not automatically remove the {$280.00} additional MIP payment that was added into our mortgage even though we had reached every requirement that they had listed on the loan docs and previous correspondence that we had with them. It wasn't until XX/XX/XXXX when I was reviewing our statement in preparation for getting ready for end of year tax info that I noticed that they had never removed it. I called them immediately to notify them to do so and to also request that we be reimburse for XX/XX/XXXX-XX/XX/XXXX 5 months of MIP that we made with our mortgage payment after all their requirements had been met. The Lady removed the MIP for the following XXXX statement and said that she would have to transfer me to someone higher up to in order to find out about returning our 5 payments of MIP from XXXXXX/XX/XXXX( {$280.00} x 5 = {$1400.00} ). She transferred me to XXXX XXXX. I explained everything in great detail to XXXX and she said she would follow up with me by XX/XX/XXXX with a reply to these funds being returned. Now remember, I am calling them in XX/XX/XXXX and because we pay early they already had our XXXX. payment with the MIP of {$280.00} included in that payment. XX/XX/XXXX rolled around and XXXX called and left me a message saying that she was still working on trying to get the investigate about returning the {$1400.00} of MIP over payments to us. She said she would contact us by XX/XX/XXXX. She called us on XX/XX/XXXX and told us that they decided that they would not be returning the funds because it was our responsibility to inform them to remove the MIP. We were shocked and had quit a few choice words to bestow on them. We demanded to speak with a supervisor and XXXX transferred my call to XXXX XXXX, who commented quit a few times on the phone with us " that even though she personally agreed with us expecting to have our funds returned to us Wells Fargo 's decision was to keep the 5 extra MIP payments of {$1400.00} ''. 

Let me tell you what bothers us the most about this, like I explained earlier ... this is not our first rodeo when it comes to mortgages. There are good lenders and bad lenders. Other lenders I have worked with in the past automatically have removed the MIP for some of my real estate clients on their FHA loans when they met the requirements. But for the average " Joe '', they are not as educated on how MIP or PMI works on a loan and may never even know to ask when it can officially be removed from their mortgage payment. Most Americans, let 's face it will end up paying MIP or PMI for their whole loan term if a financial institution isn't responsible for taking it off after all your contractual obligations are met to have it permanently removed from your payment. We were never told that we had to contact them to have it removed. Even in the letters that they sent me to document us asking for it to be removed they never stated that the burden fell on us to contact them to have it removed! We also contacted them on more than one occasion to document that we were trying to get it removed, which is more than most people ever do ... or even know to do. SHAME ON YOU WELLS FARGO, for stealing {$280.00} every month from us for 5 months until I contacted you to reveal the money they were basically pocketing from us. The Homeowners Protection Act is suppose to protect a consumer from financial fraud, which is what Wells Fargo Home Mortgage did to us. We could of for years went on paying that additional {$280.00} each month until XX/XX/XXXX when they listed on the original amortization schedule for the MI to expire if all the other requirements were met. Even though they issued us a new amortization schedule reflecting our additional principal of {$360.00} each month ... which we paid on time each month. Who knows if in XX/XX/XXXX if they ever would of removed the MIP on their own ... or would they use the same lame excuse, that we needed to contact them to have if removed. 

Also, it should be noted that last year Wells Fargo Home Mortgage who also forced us to have a escrow account with them for paying our taxes and insurance, did not pay our insurance on time. We received a cancellation letter from our insurance company notifying us that Wells Fargo had not send them our insurance payment. Wells Fargo after we contacted them and explained their error they paid the payment 12 days late. We never wanted an escrow account, but lenders force you to pay them fees to control your taxes and insurance to be paid on time. I understand why they do this, but for two financially responsible people like we are ... we would rather be in charge of paying it ourselves and not paying the fees for them to manage it ... especially when they do a poor job and pay it late ... leaving us uninsured for 12 days. 

We are asking for what is right and fair, that we be reimburse for those extra 5 payments of MIP equalling a total of {$1400.00}. We want this directly paid back to us in a check, we will not settle for it being applied to our principal loan amount. These are funds that we could of used on a number of other things over the past five months and we are outraged by the GREED of Wells Fargo Home Mortgage, to steal these funds from us!