Consumer complaint received 2017-01-11
Product: Mortgage — VA mortgage
Issue: Loan servicing, payments, escrow account — 
Company: WELLS FARGO & COMPANY (NJ)

Wells Fargo is overcharging me a cushion of greater than 1/6 the annual payment amount in my escrow. I received a shortage notice that claims to require a XXXX payment to make the escrow projected balance of the projected low point 1/6 my annual mortgage. However, by their math of required balance payments to and from the escrow 11 months out of 12 with this payment would make the escrow cushion greater than 1 /6 the annual anticipated payments. 12 CFR Part 1024.17 ( c ) ( 1 ) ( ii ) and 12 CFR 1024.17 ( c ) ( 5 ) states : " the servicer may add an amount to maintain a cushion no greater than one-sixth ( 1/6 ) of the estimated total annual payments from the account. '' " Cushion or reserve ( hereafter cushion ) means funds that a servicer may require a borrower to pay into an escrow account to cover unanticipated disbursements or disbursements made before the borrower 's payments are available in the account, as limited by 1024.17 ( c ). '' " the servicer may add an amount to maintain a cushion no greater than one-sixth ( 1/6 ) of the estimated total annual payments from the account. 12 CFR 1024.14 '' The 2-month maximum is XXXX using Wells Fargo 's breakdown and the correct {$1300.00}. Requiring me to hold a balance greater than that is a violation of this order. Requiring me to hold over 2 times the maximum amount in my escrow is a flagrant violation of this order. Wells Fargo is doing just that. 
Without any changes to my required escrow payment, my escrow funds are projected to cover the yearly debits with no deficits and will violate 12 CFR 1024.17 by holding escrow greater than {$1300.00}. Wells Fargo has included a debit of {$1100.00} that the escrow is no longer responsible for paying in their breakdown. They have been informed of this error and refuse to adjust the breakdown accordingly. 



The correct monthly escrow payment for my account should be {$650.00}. This correct forecast shows never a deficiency and does not allow for the escrow amount to be flagrantly over the maximum for 12 months out of 12 paid in full or 9 out of 12 paid over time even with their inflated numbers, as Wells Fargo is attempting to do. Wells Fargo 's {$740.00} escrow payment plus the fictional shortage of either pay in full {$1100.00} once or every month {$95.00} is wrong. Wells Fargo is charging well over the legal amount. This amortization shows Wells Fargo 's math is inflated due to a false payment. 
With the paid in full option Wells Fargo will be in excess the maximum amount every month for the 12 months, due to an extra payment that has inflated the maximum and well more the twice the maximum at times. They have been informed and refuse to do anything to prevent this violation of the 12 CFR 1024. 

By XXXX, with the option to pay over 12 months Wells Fargo will force the escrow balance above 1/6 the maximum and it will never be corrected. This error is caused by Wells Fargo having an extra payment in their debit breakdown that masks the projected balances to be lower than they will be. 
The point of these escrow accounts is to pay taxes, insurance, etc. for the mortgaged property, not force homeowners to inflate the bank 's balance sheet with flagrant amount of funds from homeowners at zero percent interest rates. This idea Wells Fargo is running in contrary with 12 CFR 1024.14 's very intentions to keep ordinary people from predatory bankers like Wells Fargo. This bank has a history of pandemic fraudulent practices, opening secret accounts using their own customers as the victims. This is just the next systemic overstep on their quest to defrauding their shareholders and government under the un-monitored cloak of escrow accounts. My escrow payment should be XXXX a month with no extra payment for a shortage or I request Wells Fargo to close my escrow account with the balance sent to me immediately so I can take care of the taxes on my own. Both options have been