Consumer complaint received 2018-11-19
Product: Mortgage — Other type of mortgage
Issue: Closing on a mortgage — 
Company: WELLS FARGO & COMPANY (IL)

My complaint concerns two charges in my closing disclosure documents with Wells Fargo : a rate lock extension fee ( {$220.00} ) and an inspection fee ( {$140.00} ). While these fees may seem small, they amount to about 15 % of my monthly income. 

I began an application for a cash-out refinance loan on XX/XX/XXXX. My interest rate was locked until XX/XX/XXXX. I was told the process would take 30-45 days, so I should have no problem staying within the timeline. My appraisal wasn't ordered by the bank until mid-XXXX. Initially, I scheduled the appraisal for XX/XX/XXXX, but pushed it back one week on the advice of my loan officer. The appraisal took place on XX/XX/XXXX and was received by the bank on XX/XX/XXXX. The appraiser noted that the roof and soffit " seem to be in poor condition '' and that the detached garage has broken windows. Of course, the condition of the roof was one reason I was applying for a loan in the first place -- I live in an historic home, and there are specific requirements for facade repairs, which require highly specialized work. 

Nevertheless, I got a request from Wells Fargo to hire a licensed roofer to complete " all repairs '' so that it is in " satisfactory condition '' before closing. What does " all repairs '' mean? The home loan processor could only read what the appraiser had written down -- that the roof seemed to be in poor condition. I asked the appraiser. She said she hadn't been told by the bank that they were requiring repairs but would let me know the specifics when she did. I never heard back from her. I called a roofing company to come out for an estimate. The earliest day they were available was XX/XX/XXXX. 

In the meantime, I got an email indicating that the bank is also requiring the windows on the garage to be repaired. The email referred to " the additional attachment that addresses the windows. '' That attachment was just pictures from the appraisal, no specifications on the window repair. My official XXXX site, which had populated a request for the roof repair did not have the same for the windows. Regardless, I had someone I knew fix the windows, as I was told. 

Roofing Company # 1 came out for an estimate on XX/XX/XXXX and said they needed to come back for a second appointment, one week later. But they never showed up for that second appointment. So I called another roofing company. They came on XX/XX/XXXX and told me they would have an estimate for me in a couple days but they wouldn't be able to do the work until the spring. Meanwhile, the Roofing Company # 1 called and apologized for missing their appointment but they, too, were unavailable until spring. I related all this to the bank and was asked if they couldn't " just do a roof inspection. '' That was a different request than completing repairs. So, with that new goal, I scheduled a roof inspection for the next week with Roofing Company # 2, which cost {$350.00}, and I got the inspection back on XX/XX/XXXX. 

What followed was a series of additional requests that trickled in, never on the same day : the underwriter asked for proof that the roof work couldn't be done in the spring. I gave them the message I had received from one roofing company and put them in touch with the other roofing company, who had done the inspection. The roofer assured them the work would be too dangerous in winter weather. Then they wanted to talk to the roofer about whether the damaged part of the roof made the house uninhabitable. The roofer assured them it didn't. On XX/XX/XXXX, I was told the underwriter didn't feel comfortable making a decision and had handed my application off to an escalation team. On XX/XX/XXXX, they asked for an estimate from the roofing company. Of course, at this point, I was definitely going past the lock rate deadline, which I was told generally meant a fee, but since I had done everything I could to complete their requirements in a timely manner, my loan officer would try to have the fee waived. 

At first, I was told my fee was waived, but just a few days later, they reversed that decision because, as it was related to me, " the collateral wasn't ready. '' But the bank had also agreed to approve the loan with an escrow hold back, which would allow for the repairs to be done in the spring. When I spoke to the loan officer about how disappointed I was in this decision, I indicated that I didn't seem to have a choice to extend the rate or not. My assumption was that if I chose not to pay the fee, the interest rate would simply be reassessed, but instead I was told that I would actually have to start the entire loan process over again, which meant a 30-day waiting period, in which case, my interest rate would almost certainly go up. This was not related in the documents that mentioned the possibility of a extension fee. In short, I didn't really have a choice. 

Apart from the extension fee, I understood I would also have to pay a fee of {$140.00} for a final inspection by the appraiser when the necessary repairs were done. At first, this was listed as one fee, but when I received my closing disclosure documents today ( XX/XX/XXXX ), that amount had doubled because they required the appraiser to come twice -- once to check the windows before the closing and once to check the roof repairs in the spring. I had given them photo documentation of the repaired windows, but since I had not formally hired someone to do the work, I didn't have a receipt. The home loan processor said they had asked underwriting to combine the final inspection and just do it once in the spring but they simply said " it would have to be done prior to closing, '' even though the appraiser will literally do the very thing I did, which is take pictures of the garage with her cell phone and send it to the bank. 

Both of these charges fail to meet the standards of reasonability. Not only were the delays which pushed me behind the rate lock deadline almost exclusively because of the actions of Wells Fargo, but the decision to charge me an additional {$140.00} for an inspection comes without any justification. Moreover, the language around the extension fee is ambiguous to the point of conflicting. In the Commitment Letter, it says the following : " Should you require a commitment date extension, you MAY be charged a fee and will be responsible for any costs if the extension requires loan documents to be updated '' but in the Price Range Protection Confirmation, footnote one says, " If loan does not close and funds disbursed on or before the expiration date, your loan WILL BE RE-PRICED and this may result in pricing increases. However, at the option of Wells Fargo Bank, N.A., you may be permitted to keep your rate the same by paying an extension fee to extend the rate lock. '' This doesn't indicate that I would have to start the application anew, as I was told, and it also shifts from making the fee a possibility ( as it is in the former document ) to an inevitability. That is, on its most literal level, a contradiction in terms. 

My loan is not a large amount of money in the grand scheme of things, but Wells Fargo stands to make {$84000.00} from my repayments. It seems a small sacrifice to absorb {$360.00} in the name of customer service, something Wells Fargo currently has an abysmal reputation for.