Complaint Review: Wells Fargo Home Mortgage N.A. - San Francisco California

In 2005 my wife and I approached WFHM for a residential construction loan.  We went through a rigorous application process, met their criteria and were approved for a Construction to Permanent loan.  As advertised, the Construction to Permanent Advantage loan is a loan that would initially finance the home construction, which after completion would then be converted into a permanent long term loan product that is chosen prior to the mortgage closing.  We closed on the Construction to Perm loan in February of 2005.  Construction began soon after. 

During the course of development problems arose between us and the home builder, as a result construction was halted.  We explored our options and called upon outside parties to mediate the situation.   

Wells Fargos Account Resolutions, (the department overseeing short term loan financing, construction draws and which is comprised of people who have the ability to extend the terms of short term loans by 6 or 12 months),  appeared completely uninterested in our tribulations with the builder.  The Account Resolutions department was expressly concerned with our maintaining of interest payments, offering no advice. 

We explained to our Account Resolutions representative and his supervisor, in detail, the issues hampering the construction process.  Among others, these issues involved hidden cost, product inefficiency, delayed permit approvals and design errors.  The costs associated with these issues were significant.  We exhausted our life savings on legal fees, rent, storage fees, loss of time at work, penalties and other unexpected costs associated with the home construction.   In addition to the monies allocated in the construction fund, on average our expenditures were in the thousands per draw (or phase).  Since the loan had already closed (02/29/05), these bills, however unexpected, had to be satisfied before construction could commence. 

After Account Resolutions received our report, they informed us that due to the prolonged construction period, our short term construction loan would mature and that we would need an extension to continue.  We were told that a $500 fee would accompany each extension.  We were overwhelmed with the mounting fees but had no problem complying since we had already invested so much time and effort into the completion of our home.   

We resolved all issues with the home builder and construction resumed in (2006).  Our home was finally completed 2 years later in June of 2008, wherein we received a certificate of occupancy and the keys to our new home.  The dilemma surfaced during this last phase of construction where WFHM was to transition our short term construction loan into the permanent 30 year mortgage we had originally qualified and supplied a substantial down payment towards. 

Weeks before the completion of our home, we were informed by our loan officer, that the loan program we originally applied for was no longer available.  This was extremely shocking news, however, he told us that he would begin examining other loan programs and see what could be done.  He requested that we supply updated personal and financial information such as, bank statement, employer information, retirement funds, etc.  Before long credit checks were being performed again and it appeared as if we were restarting the whole application process.  Then came the denial letters.  Each time we were denied, we would apply for another loan under separate less appealing conditions.  Time continued to pass and more frequently we experienced instances where we could not get in touch with our loan officer or his staff, our personal documentation was lost or misplaced and had to be resubmitted (multiple times) and underwriting times were broadened.  The excuses were numerous.  New loan officers and supposed underwriters were brought into the mix, requesting additional income, monies at closing, surplus savings, etc.  The requests were increasingly ridiculous, especially considering that, nothing had changed since our original application.  In fact our financial situation had improved in our savings, credit scores and assets.   

It appeared as though Well Fargo was deliberately fabricating these absurd requests, as if to discourage us.  One such instance, during a phone conversation with our loan officers Supervisor, I was told to be honest, were not going to get you into a loan unless you show a $40k increase in combined annual income.  To which I replied, if thats what it will take then I will make it happen.  His rebuttal was that of sarcasm and the conversation ended there.  Two weeks later I returned with payroll and bank statements showing a drastic increase in income surpassing his request.  I was then called into an in person conference between my loan officer and his Supervisor and informed that I would need to have more money at closing.  During that same conference, I arranged electronically, the availability of additional funds via my retirement account.  I was then told that due to the (LTV) loan to value of the home in conjunction with the conforming lending rates for this county (Monroe), that we still would not qualify for any loans that would satisfy the principal loan amount.  My next plan was to decrease the loan amount, which at that time had included the last remaining bill from the Home Builder.

A month later I returned to my loan officer and his Supervisor, again showing evidence where I met their stringent requirements, reducing the loan amount by $22k, only to be told that there is nothing they could do for us.  We were left without a mortgage, only locked into WFHMs short term construction loan.  We attempted in vain to secure a mortgage from other mortgage lenders, however, to date nothing has materialized.  Since 2008 we have paid to WFHM stiff penalties and an exaggerated interest rate on the principal amount, to extend our short term construction loan while we search for a mortgage.  Regardless of our financial standing, and work history and the fact that we are current with respect to loan payments, Wells Fargo has accelerated our loan and called the note.  Wells Fargo has been informed of the CMA statistics for this particular development and know that the 2 homes that have been placed on the market have sat dormant for 3 years because no one can afford the prices that accompany homes of this quality.  Wells Fargo is also aware of the conforming lending limits for Monroe County and they know the median household income.  All facts show that we are viable customers yet they still choose to foreclose on our home, threatening our life savings which we poured into its construction.    We have appealed to WFHM time and time again, however the company appears focused on acquiring our new home.  

It is obvious that Wells Fargo has manipulated us into this situation.  Even more unscrupulous is that they have taken advantage of us by imposing absurd fees and interest under the guise of preparing for a permanent mortgage, when they had no intent of giving us the mortgage from the beginning.   We have been taken advantage of by this giant in the mortgage industry.  They lured us into this deal and waited for our point of vulnerability (the closing) then they shamelessly played a cat and mouse game while robbing us of thousands of dollars, pretending they would secure a mortgage for us.  Now they are threatening this unethical act of stealing our home from us. 

Had WFHM not gotten caught with the sub-prime lending scam, I believe they would have forced us into an extremely high adjustable rate mortgage.  Since their scam was exposed, they had no choice but to drag us along and get as much money as they could from us along the way.

I cannot put into words the immense stress this has placed on my family.  The entire home construction project was extremely trying.  It took a lot of energy, not to mention the thousands of unexpected out-of-pocket expenses we had to invest.  To finally have our home completed just to find out that we are victims of a much larger scam by one of the giants in the financial industry.

We have spent countless hours communicating back and forth with WFHM.  We have spent hours documenting our communications.  We have spent hours searching for mortgages.  We have volumes of paperwork chronicling our attempts to get WFHM to honor our original agreement.  

I encourage anyone having been placed in similar hardship by Wells Fargo to make your experience known, contact your local, state and federal representatives.  It is unconscionable that WFHM can literally rob people without penalty or consequence. 

Sincerely,

JV

Stroudsburg, PA