Consumer complaint received 2024-09-06 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Interest rate
Company: WELLS FARGO & COMPANY
State: CA

Complaint narrative:
We are in an ARM mortgage signed wth WELLS FARGO in XXXX. First rest was XXXX. Rates were low thru XXXX and XXXX, so we paid no mind. On XX/XX/XXXX of XXXX the rate moved from 2.5 % to 4.5 %. On XX/XX/XXXX the rate moved to 6.5 %. And on XX/XX/XXXX the rate they are asking for went to 8 %. I began to look at our XXXX contract when I saw that last reset. I found we were orginally tied to the LIBOR rate. I went online and saw plain as day that the LIBOR was retired, and the guidance from the Federal Government was to replce with the XXXX rate. But Wells is using a vaguely know rate called the XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX This was an arbitrary choice by Wells, as I see it. No letter. No bargaining or shopping for a better rate, and no way of knowing of the 2.25 % margin that our contract specified was indeed being earned by Wells, or if it much they are making now.

However. there are more complaints % vs Wells than any bank, and also, they were close to bankruptcy in late XXXX and now they are fine. So maybe this complaint multiplied by the size of the USA is why they turned things around. In other words, their clients are possibly paying for their CEO pay. 

We began paying less than the full amount requested, always making sure that the interest they are asking for was paid at least. 

I have looked up the SOFR rates on XX/XX/XXXX the agreed upon date of reset. It was under 1 %. You can look it up yourself at https : XXXX If we can enforce and insist that SOFR be used ( there is no guidance in the contract except " another comparable index will be used if one is retired " ) then the rate in XXXX should have been .9 % plus 2.25 margin or 3.15 rounded to nearest eighth ( as per contract, which I can provide ). That's 3.125 and not 4.5. That means XXXX owes us for the full payments we made from XX/XX/XXXX thru XXXX of XXXX. At 1.375 % of XXXX XXXX ( the approxomate mortgage amount then ) that is XXXX and likely more. The same happens from XXXX to XXXX. It seems to us that if the SOFR were used since XXXX ( and we aree sure Wells themselves did not borrow money at higher rates than the SOFR- this is just interest rate gauging ) that we are owed as much as XXXX to XXXX XXXX which should be applied to the loan. 

XXXX of this above checks out mathematically, provided that Wells must use the " comparable and recommended rate '' the SOFR. We don't wee how they get to choose rates when one is retired. And especially if the rate they choose is 1. obscure 2. higher than rate the FED recommended to use to replace the LIBOR 3. Allows Wells to earm more than the 2.25 % margin. ( We'd have to see where they borrow their money from in interrogatories for that. Legal stuff. ) But I do think this is a class action lawsuit vs Wells and it would not be the first one. 
They have not followed FED 's guidance. We are paying more than we would have had they follwed Fed guidance. They went from almost bankrupt to swimming in money in 2 years. ARM mortgage manipulation was one of the main reasons the FED retired the LIBOR. That and it did not reflect what banks actually borrow money at.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation