New Complaint (?)

We received a letter from the Comptroller of the Currency on 11/27/12.  I figured it was to wrap up the complaint that we made on 8/27/12.  Exactly three months earlier.

It was actually a letter saying that WFHM didn't fall under their jurisdiction.  Which is strange, because three months ago they contacted WFHM.  Maybe they forgot.

In any case, this let to a new call from Executive Mortgage Specialist #3 on 12/3/12.  I was a little surprised.  I apologized, because I had not initiated this complaint, at least not directly.  In any case, I brought EMS #3 up to speed, reiterated my displeasure with the way PMI removal was communicated (incorrectly), how my demand to remove PMI was handled (no response in the 30 days allowed), and how the offer to remove PMI on the condition of a current appraisal was flawed (we believe they have waived the right to request an appaisal because of their delays).

We'll see where this goes.  At this point, we feel the best option is legal.  I've been hoping that WFHM will realize that they have made a mistake and just agree to remove PMI going back to when we hit 80% LTV.  We would have paid it down even sooner if we had a correct response, but we'd be satisfied with that.

Summary as of 10/19/12

This has been hard to follow, so let's recap.

I tried to find out how to remove PMI from my loan on 2/7/12.  I was told that I needed to get to 78% LTV (wrong).  I asked who I could speak to about this error and was told to fax to the Resolution Department.  This led to lot's of back and forth between Wells Fargo Home Mortgage (WFHM) and me via fax and snail mail.  I would quote the HPA showing where it said 80%, and they would respond back with 78%.  I finally paid down to 80% and demanded removal.  This got nowhere, so I complained to the Office of the Comptroller of the Currency (OCC) on 8/27/12.    This resulted in phone call from Executive Mortgage Specialist #1 (EMS1) on 8/29/12!  EMS1 sand I played phone tag until 9/17/12 when she said that I had to get an appraisal. 

On 9/18/12, I figured I got as far as the EMS could go, so I started this blog.  I also complained to all of the executives I could find via email and asked for them to resolve this issue  (executive email carpet bomb [EECB]).  It worked.  Kind of.

On 9/19/12, EMS #2 called, unaware that I had been working with EMS#1.  We did the usual phone tag, but after talking with him, he offered to go to the PMI department to get a resolution.  What is funny is that I was receiving snail mail from EMS #1 (dated two weeks earlier) saying that she needed more time to research.

Also, on 9/24/12, we also recieved a nice letter from WFHM saying that they had screwed up the escrow calculations and that we would need to make a lump payment or increase our monthly payments.  Nice job.

On 10/19/12 EMS #2 called back with a resolution from the PMI department.  They offered to remove PMI going back to when we hit 80% LTV (we disagreed on the date) as long as a current appraisal came in at or above the loan value.

This is at least progress, but there are several problems with this approach.

1. We would have got the appraisal back in February if someone had given us the correct information.  An appraisal now may not be relevant to the value in February.
2. As I had shown repeatedly, our PMI disclosure had the caveat "The servicer receives, if requested and at your expense, evidence that the value of the property has not declined below its original value..."  Bold added for emphasis.  An appraisal was not asked for when I made the request, except for the 78% deletion option.  It was not asked for when we demanded PMI removal.  We believe WFHM has given up their right to request an appraisal for the 80% deletion option and should honor the terms in the disclosure letter and the Homeowner's Protection Act of 1998 (HPA)
3. Servicer has 30 days to respond to declined PMI removal according to the HPA.  I was never told that it was declined for lack of appraisal.  In fact, the only response I got was that we had to pay down to 78%.  This is a violation of the HPA. 

We simply want WFHM to honor the terms of the PMI disclosure letter and the HPA by removing our PMI as of the date we reached 80% LTV

That is the status as of 10/17/12.  We started on 2/7/12, had many faxes, a complaint to the OCC, two Executive Mortgage Specialists, and one complaint to the Wells Fargo executives.  We did get WFHM to admit that they had made an error with requesting 78% LTV repeatedly.  Fat lot of good that does us, although they offered to remove PMI as of when we reached 80% LTV, IF a current mortgage supported the original value.

More Phone Tag - New Player

After documenting the series of events leading to my complaint to the OCC and a call from an executive mortgage specialist, I sent an email to Wells Fargo executives to express my displeasure with the service I had received so far.  I included a link to this blog.

I received a new call from a different executive mortgage specialist on 9/19/12.  At home.  While I was at work.  I called back on the 19th and left my work number.

I received a call back on the 20th.  At home.  Again.  While I was at work.

I called back again on the 21st, reiterating that nobody is at home during work hours and to call back using my work number.

Despite a promise on the machine to return calls within 24 hours, I have not heard back as of 9/24/12 by the close of business.

Phone Tag

Summary

My wife and I tried to get PMI removed from our Wells Fargo Home Mortgage (WFHM) loan via the 80% LTV rule in the Homeowners Protection Act (HPA) of 1998.  WFHM first refused to acknowledge that there was a provision, so we paid down to 80% and demanded cancellation.  WFHM played dumb and told us that we had to pay down to 78%.  We said enough, already cancel or we'll complain to the Office of the Comptroller of the Currency (OCC).  WFHM then said, oh yeah, you actually CAN request cancellation at 80% but you need to get an appraisal.  HAHA.

We complained to the OCC.  WFHM finally noticed and assigned an Executive Mortgage Specialist to be our POC.  Now we're playing phone tag.

We had called a customer service representative, sent six faxes, and received two form letters that did not address our questions over the last six months.  I believe that WFHM has violated several parts of the HPA, including timely response back after requesting PMI and not identifying the type of evidence required to prove that the property value had not declined.  They also refused to acknowledge that the borrower can initiate a request from PMI cancellation when the LTV reaches 80% for over six months, leading to seven months and counting of extra PMI payments.

Executive Mortgage Specialist

I had a message from the Executive Mortgage Specialist on August 29, 2012.  I left a message back the following week with my cell phone number.  I think we missed calls again, so I left my work number later.  We finally spoke on September 17, 2012, almost three weeks after the first call.

As usual, I was optomistic that I could use logic and facts to show where WFHM had been wrong.  I was hoping that we could resolve the issue together.  Instead, I got more script-following.  The specialist repeatedly said that she could understand my frustration, but that WFHM would need a current appraisal to go forward.  Once again, this is something that I would have liked to have hear SEVEN months ago when I first called (2/7/12).  She gave me three options.

1. Automatic termination of PMI if we pay to 78% LTV
2. Cancellation if an appraisal or Brokers Price Opinion comes in high enough to give us 80% LTV.  Of course, we have to use WFHM-approved appraisers.
3. Appraisal that shows 75% LTV in the case of structural improvements.

I tried one last appeal to humanity, explaining that because WFHM had not been able to get correct information to me for months, the value has probably dropped, whereas it would have been ok or much closer if we had done it when I made initial contact.  I asked if they we pay for the appraisal, which seemed like the least they could do.

Of course, I was told that WFHM can understand my frustration, but they needed a current valuation to go forward.

That's got to be a tough job.

Tag, You're It

Right after that call, I decided to document everything in a blog.  But first, I wanted to confirm which faxes had actually been received by WFHM.  I didn't want to unfairly accuse them of not responding to something that they had not received.  As I mentioned, we sent at least seven faxes, but only received three replies.  I'm sure that some of them did not make it.  However, I have still not heard back as of 9/18/12.

So Now What?

My goal is to document everything that happened.  I want to give others in the same position some information that they can use to get their PMI removed, because clearly the banks aren't going to help.  I want people to know how I've been treated by WFHM.  It hasn't been horrible, but it shows a pattern of borderline incompetence.  Clearly, it is not in their business interest to help their consumers remove a bogus fee (PMI).  I'd like to make enough of an issue of this that it becomes their business interest to do the right thing.

Finally, I believe that WFHM has violated the HPA.  They did not identify the type of evidence required to prove that the value of the property had declined.  They did not respond within 30 days of my request to cancel PMI.  They refused to provide information on cancelling PMI per the 80% LTV borrower-initiated PMI cancelation requirement.

I don't know if there is enough to merit a legal case, but I will find out.  I hope that it won't come to that, that WFHM will realize that they have made a mistake (multiple), and will refund PMI back to February when I initiated the request for information.  Based on their previous pattern of behavior, I'll have better luck winning the lottery (and I don't play it).

I welcome any comments.  I especially welcome any corrections from or comments from WFHM. 

Office of the Comptroller of the Currency Complaint

Summary

My wife and I have asked Wells Fargo Home Mortgage (WFHM) repeatedly on the process to remove PMI once we reached 80% LTV.  After not receiving direction, we paid our principal down to 80% LTV and requested repeatedly the WFHM cancel our PMI.  After that didn't work, we threatened to complain to the Office of the Comptroller of the Currency (OCC).  We received a reply that finally (after six months) addressed our original question and requested an appraisal.  We have paid seven extra PMI payments at this point.  We believe that WFHM has violated the Homeowners Protection Act (HPA), and we're ready to complain to a higher power.

The Complaint

I submitted a complaint to the OCC on August 27, 2012.  The complaint summarized most of the points made in the blog so far.  I pointed out that we repeatedly requested information on how to remove PMI at 80% and were repeatedly not answered via willful omission or negligence on the part of WFHM.  I stated that we paid down the principal to 80% LTV and requested multiple times for PMI to be cancelled and were again not answered or given irrelevant information.  I asked for PMI to be removed and refunded going back to the original May request.  I should have asked for it back to February, when I first made contact with WFHM.

Complaint Response

Well the complaint finally got some attention.  We received two letters in the beginning of September that were dated August 29, 2012.

Letter One

The first letter was an Executive Mortgage Specialist from the Office of Executive Complaints.  It finally seems like we have a point of contact that can address our issues.  She stated that she attempted to contact via telephone but was unable to.  This is true.  There were two calls on August 29, 2012 to our home during business hours.  We have a mortgage.  We were working.

The letter had the usual customer service issues:  addressing the concerns of their borrowers is vital to their success, WFHM regrets any frustration that we may be experiencing, and they welcome the opportunity to assist us.

I'm just happy to be done with the fax machine and form letters after more than six months.

Letter Two

This letter was more interesting.  There was a copy of the PMI disclosure we signed as part of the load paperwork.  The key part of the disclosure was this:

PMI will only be canceled on the cancellation date only if all the following conditions are satisfied:

1. You submit a written request to the servicer of your loan for cancellation of PMI;
2. You have a good payment history;
3. You are current on your loan payments; and
4. The servicer receives, if requested and at your expense, evidence that the value of the property has not declined below its original value, and certification that there are no subordinate liens on the property

As I've mentioned, we met the first three requirements clearly.  The fourth requirement is only necessary if requested.  I asked repeatedly for the requirements earlier and never received acknowledgement that 80% LTV was allowable, much less receive requirements to provide evidence that the value of the property has not declined for the HPA 80% borrow-initiated PMI cancellation.  We submitted payment and requested cancellation.  HPA says that we should receive notice within 30 days if cancellation is not approved.  We did not receive that notice.  We didn't hear anything until the final fax response on August 23, 2012.

The cover letter was interesting.  It acknowledged that the HPA allows us to request PMI cancellation when reaching 80% LTV.  This is similar to the August 23, 2012 letter, but that letter states that it was an investor requirement rather than an HPA requirement.

The letter goes on to quote the PMI disclose, specifically the condition that the servicer receives, if requested and at your expense, evidence tht the value of the property has not declined below its original value, and certification that there are no subordinate liens on the property.  Good, we're finally on the same page.  The evidence still has to be requested, though. 

The letter then states that in the Confirmation of PMI Deletion Eligibility Requirements sent to us on May 29, 2012, the appraisal must be ordered through the Wells Fargo Home Mortgage PMI department (there's no conflict of interest there...).  Well wait just a minute.  The letter on May 29, 2012 never acknowledged the option for PMI deletion at 80% LTV AT ALL.  The only mention of an appraisal was for the case that structural improvements were made such that the new value would yield a 75% LTV.  That letter on May 29, 2012 NEVER ADDRESSED MY 80% LTV BORROWER-INITIATED PMI DELETION REQUEST AT ALL.  This is absurd.

Next Step - Call the POC

I'm hoping against hope that the Executive Mortgage Specialist will be empowered to listen to logic and do the right thing.  However, I'm not optimistic given that the first contact was during work, then followed by a letter stating "I have attempted to contact you via telephone, as my last attempt to reach you on August 29, 2012 was unsuccessful I am providing you with the following information."  Not a friendly tone.  No attempt was made to reach me via email.  I mean, who is really home during business hours?

Summary so Far (9/3/12)

1. We were told at loan origination that we could cancel PMI when we reached 80% LTV
2. We have enough money to pay our loan to 80% LTV
3. I found a statement on the Wells Fargo Home Mortgage website that stated we could request cancellation of PMI when we reached 80% LTV
4. I called a customer service rep to confirm, but was told we needed to get to either 78% LTV or 75% LTV with appraisal (???).  I was told to fax Resolutions to ask about the 80% requirement.
5. I researched the HPA and verified that I could request PMI cancellation at 80% LTV.  I also found that HPA requires evidence of a type established in advance that property value has not declined.  Not only was the evidence type not established in the PMI disclosure, but the requirement to provide evidence was made optional.
6. I prepared a fax that included a printout of the Wells Fargo Home Mortgage website where they acknowledge that a borrow can request cancellation of PMI at 80% LTV.
7. I received a form letter telling us that we could remove PMI at 78% LTV (per HPA) or 75% LTV with structural improvements and an appraisal (per investor requirements).  It neglected to mention the 80% borrower-initiated cancellation option allowed by the HPA.  Must have been an oversight...
8. We made a principal curtailment to 80% LTV on 4/30/12
9. We wrote a letter requesting PMI deletion and faxed on 5/8/12.
10. No response after two weeks, so we faxed another request to delete PMI on 5/23/12 and a third request on 5/24/12.
11. WFHM responds on 5/29/12 with the same form letter as 2/7/12.  It does not acknowledge our written request to cancel PMI.  It does not say anything about the option to request PMI cancellation at 80% LTV.  Willfully disregarding law, inept, or clever? 
12. I sent the final fax threatening to complain to the OCC on 7/9/12.  We went on vacation and did not hear back.  I noticed that the fax might not have gone through in mid-August.  That fax system sucks.
13. I sent another final fax on 8/14/12 saying that we met HPA requirements, cancel PMI, or we'll complain to the OCC.
14. We receive a new response on 8/27/12 (dated 8/23/12) saying that there is an option to delete PMI at 80% (what did they forget for six months?), but they need an appraisal.  That's six months of extra PMI paid trying to get this answer.  Also, property values have been declining while WFHM stalls.  It's a win-win for WFHM. 
15. On 8/27/12, I complained to the OCC about WFHM's repeated omissions and failure to delete our PMI.
16. We received two letters dated 8/29/12.  One was from an Executive Mortgage Specialist.  The other provided our PMI Disclosure from the loan paperwork as well as an acknowledgement that the HPA does allow borrowers to request PMI cancellation at 80% LTV.  It does request (finally) that we verify current property value using their service.  This is only six months, three weeks, and two days after I first requested the requirements for deleting PMI at 80%.

The Final Fax and Response

Summary

We've met the Homeowners Protection Act (HPA) of 1998 requirements to request removal of PMI once our loan reaches 80% LTV.  We requested removal from Wells Fargo Home Mortgage (WFHM) in May, 2012.  We were treated with a form letter that did not address our request.  We sent one final fax to appeal to reason before complaining to the Office of the Comptroller of the Currency (OCC).  It looks like it never made it.

Resend the Fax and WFHM Response

The final fax was sent on August 14, 2012.  We received a response on August 27, 2012, which was dated August 23, 2012.  They changed the format of the form letter slightly this time.  It is posted here. 

Analysis of the Response

The response dated August 23, 2012 varied slightly from the first two form letters, which did not address my request about an 80% LTV PMI deletion option, or my request to delete PMI at 80%.  Note that this is the first time that WFHM has acknowledged that there is an option for borrower-initiated cancellation of PMI when LTV reaches 80%, although they list it under Investor Requirements instead of HPA requirements.  It took OVER SIX MONTHS from my original question to get to WFHM to confirm what is written in the law and on their own website. 

In this letter, WFHM states (and I paraphrase):
Thanks for inquiring about removing PMI.  You have two options, as long as you haven't had any late payments.
1) HPA requirements - Pay down to 78% LTV
2) Investor requirements - Order an appraisal to verify that principal is at 80% LTV
You have to use our appraiser.


This seems to be in agreement with the HPA, other than referring to the 80% LTV requirement as an investor requirement rather than an HPA requirement.  This is what I should have been told on February 7, 2012 when I called.

If we had been told this on February 7, when I first called, we would have immediately ordered an appraisal.  Our house had just been appraised less than five months before that, and probably would have been fine.  At this point, six months later, I don't believe that to be the case any more.  The delay has cost us an opportunity to remove PMI for six months.

Homeowners Protection Act Violations?

I believe that there are at least two parts of the HPA that WFHM has violated.  Unfortunately, the HPA doesn't cover negligence or stalling, but there is bad faith law for that.  The HPA does have a notification requirement, though.

Notification Upon  Cancellation or Termination

Section 5 of the HPA states:
(a) IN GENERAL.—Not later than 30 days after the date of cancellation or termination of a private mortgage insurance requirement in accordance with this Act, the servicer shall notify the mortgagor in writing—
(1) that the private mortgage insurance has terminated and that the mortgagor no longer has private mortgage insurance; and
(2) that no further premiums, payments, or other fees shall be due or payable by the mortgagor in connection with the private mortgage insurance.
(b) NOTICE OF GROUNDS.—
(1) IN GENERAL.—If a servicer determines that a mortgage did not meet the requirements for termination or cancellation of private mortgage insurance under subsection (a) or (b) of section 3, the servicer shall provide written notice to the mortgagor of the grounds relied on to make the determination (including the results of any appraisal used to make the determination).
(2) TIMING.—Notice required by paragraph (1) shall be provided—
(A) with respect to cancellation of private mortgage insurance under section 3(a), not later than 30 days after
the later of—
(i) the date on which a request is received under section 3(a)(1); or
(ii) the date on which the mortgagor satisfies any evidence and certification requirements under section 3(a)(3); and
(B) with respect to termination of private mortgage insurance under section 3(b), not later than 30 days after
the scheduled termination date.

That's a mouthful.  The part that applies here is that if the servicer (WFHM) determines that a mortgage does not meet requirements for cancellation, it has to provide written notice to the mortgagor (us) within 30 days of us submitting a request and fulfilling any evidence and certification requirements.

Clearly, WFHM has given us no requirement to provide evidence that the property value has declined until the August 23, 2012 letter.  Until then, they have blissfully ignored my requests for information and request for cancellation.  However, according to the law, they owed me a response within 30 days of the May, 2012 cancellation request, where we had fulfilled all requirements of the HPA.

This is the first time that WFHM has requested an appraisal in conjunction with the 80% LTV requirement.  The PMI disclosure stated that evidence showing that the property value has not declined is only needed if requested by the servicer.  I originally requested PMI deletion in May.  The request for an appraisal did not come until three months later.

 Evidence of a Type Established in Advance

The HPA also requires that the mortgagor (us) provide evidence (of a type established in advance and made known to the mortgagor by the servicer promptly upon receipt of a request under paragraph (1)) that the value of the property securing the mortgage has not declined below the original value of the property (Section 3a3B).  The PMI disclosure did not identify the evidence type, only that it may be required by the servicer.  Despite my best efforts to get servicer requirements for cancelling PMI at 80% LTV (phone call 2/7/12, fax 2/10/12, fax 5/8/12, fax 5/23/12, fax 5/24/12, fax 7/9/12), we were never informed of the evidence type, or even that evidence was required.  Remember that it is optional according to the PMI disclosure.

I believe that WFHM has not followed the HPA in this respect as well.

Complaint Time

At this point (August 27, 2012), I believe that WFHM has violated the HPA by willfully ignoring my requests for borrower-initiated PMI cancellation.  When I threatened to complain to the OCC, they finally (after six months) acknowledged that there is an option to cancel PMI at 80% LTV.  This is the first time that they request an appraisal to prove that property value has not decreased.  At this point, I believe that our property value may have decreased, and we have paid six extra months of PMI trying to get a straight answer.

The next step is a complaint to the OCC.

Summary so Far (8/27/12)

1. We were told at loan origination that we could cancel PMI when we reached 80% LTV
2. We have enough money to pay our loan to 80% LTV
3. I found a statement on the Wells Fargo Home Mortgage website that stated we could request cancellation of PMI when we reached 80% LTV
4. I called a customer service rep to confirm, but was told we needed to get to either 78% LTV or 75% LTV with appraisal (???).  I was told to fax Resolutions to ask about the 80% requirement.
5. I researched the HPA and verified that I could request PMI cancellation at 80% LTV.  I also found that HPA requires evidence of a type established in advance that property value has not declined.  Not only was the evidence type not established in the PMI disclosure, but the requirement to provide evidence was made optional.
6. I prepared a fax that included a printout of the Wells Fargo Home Mortgage website where they acknowledge that a borrow can request cancellation of PMI at 80% LTV.
7. I received a form letter telling us that we could remove PMI at 78% LTV (per HPA) or 75% LTV with structural improvements and an appraisal (per investor requirements).  It neglected to mention the 80% borrower-initiated cancellation option allowed by the HPA.  Must have been an oversight...
8. We made a principal curtailment to 80% LTV on 4/30/12
9. We wrote a letter requesting PMI deletion and faxed on 5/8/12.
10. No response after two weeks, so we faxed another request to delete PMI on 5/23/12 and a third request on 5/24/12.
11. WFHM responds on 5/29/12 with the same form letter as 2/7/12.  It does not acknowledge our written request to cancel PMI.  It does not say anything about the option to request PMI cancellation at 80% LTV.  Willfully disregarding law, inept, or clever? 
12. I sent the final fax threatening to complain to the OCC on 7/9/12.  We went on vacation and did not hear back.  I noticed that the fax might not have gone through in mid-August.  That fax system sucks.
13. I sent another final fax on 8/14/12 saying that we met HPA requirements, cancel PMI, or we'll complain to the OCC.
14. We receive a new response on 8/27/12 (dated 8/23/12) saying that there is an option to delete PMI at 80% (what did they forget for six months?), but they need an appraisal.  That's six months of extra PMI paid trying to get this answer.  Also, property values have been declining while WFHM stalls.  It's a win-win for WFHM.

Reasoning with the Machine

Summary

By June 1, 2012, we've confirmed via Wells Fargo Home Mortgage (WFHM) website and Homeowners Protection Act (HPA) on 1998 that we can request PMI deletion when we reach 80% LTV.  WFHM will not acknowledge this fact and insists that we pay to 78% LTV or have an appraisal done showing that structural improvements have increased the value to 75% LTV via customer representative in February and two form letters in Feburary and May.  At least they are consistent.

Final Attempt

I'm patient, but now I'm starting to realize that faxes aren't going to get anywhere.  Like a lot of people, I dislike conflict, so I'm hoping that a final strongly worded letter can make someone at WFHM see reason.  Go ahead, laugh.

The Letter

On July 9, 2012 we fax another letter.  This time, we quote the HPA (again) and show that we've met the requirements.  We demanded (yea verily) that PMI be removed effective our original request date in May.  Further, we said that if we do not hear back in 10 days, we will submit a complaint with the Office of the Comptroller of the Currency (OCC).

10 Days Later

Do you think WFHM caved in and removed our PMI?  Of course not!  We didn't hear a peep.  I went back in mid-August and checked the transmission log, and it looked like the letter never made it.

Summary so Far (8/15/12)

1. We were told at loan origination that we could cancel PMI when we reached 80% LTV
2. We have enough money to pay our loan to 80% LTV
3. I found a statement on the Wells Fargo Home Mortgage website that stated we could request cancellation of PMI when we reached 80% LTV
4. I called a customer service rep to confirm, but was told we needed to get to either 78% LTV or 75% LTV with appraisal (???).  I was told to fax Resolutions to ask about the 80% requirement.
5. I researched the HPA and verified that I could request PMI cancellation at 80% LTV.  I also found that HPA requires evidence of a type established in advance that property value has not declined.  Not only was the evidence type not established in the PMI disclosure, but the requirement to provide evidence was made optional.
6. I prepared a fax that included a printout of the Wells Fargo Home Mortgage website where they acknowledge that a borrow can request cancellation of PMI at 80% LTV.
7. I received a form letter telling us that we could remove PMI at 78% LTV (per HPA) or 75% LTV with structural improvements and an appraisal (per investor requirements).  It neglected to mention the 80% borrower-initiated cancellation option allowed by the HPA.  Must have been an oversight...
8. We made a principal curtailment to 80% LTV on 4/30/12
9. We wrote a letter requesting PMI deletion and faxed on 5/8/12.
10. No response after two weeks, so we faxed another request to delete PMI on 5/23/12 and a third request on 5/24/12.
11. WFHM responds on 5/29/12 with the same form letter as 2/7/12.  It does not acknowledge our written request to cancel PMI.  It does not say anything about the option to request PMI cancellation at 80% LTV.  Willfully disregarding law, inept, or clever? 
12. I sent the final fax threatening to complain to the OCC on 7/9/12.  We went on vacation and did not hear back.  I noticed that the fax might not have gone through in mid-August.  That fax system sucks.

A Response from Wells Fargo Home Mortgage

Summary

By now, we've received inaccurate information about the Homeowners Protection Act (HPA) from Wells Fargo Home Mortgage (WFHM).  It wasn't a lie so much as an omission.  They neglected to tell us that we could request to cancel our PMI once we reached 80% LTV, even after I specifically asked them about it, noted that it says we can on their website, and finding the appropriate law that says we can.

So we paid principal down to 80% and requested that WFHM delete our PMI on May 8, 2012 because we had met the requirements of the HPA.  Because it was via fax, we weren't sure that the message had been received, especially because we didn't get a response.  We include our address, phone number, and email.  We sent the request two more times on May 23 and 24.

A Response!

We received a letter from WFHM in early April.  Surely this was the confirmation that our PMI had been deleted because we had the facts and law on our side, right?  Of course not.  This was the same form letter as before saying (and I paraphrase):
Thanks for asking about deleting PMI.  Pay it down to 78% LTV or make structural improvements to get it to 75% LTV.  And here is the appraiser that you have to use.

It was a word-for-word copy of the February 7, 2012 form letter.  It still did not address the 80% LTV requirement. It also did not request an appraisal, except in the case of 75% LTV for structural improvements.  This comes up again later.

Our Response

At this point, WFHM has not even acknowledged our original requests to cancel PMI.  They must have received the requests, because they did send a form letter back that did not address my request.  I decide that I must not have explained the HPA very well (it is kind of hard to read), so I should send a better letter.

Summary so Far (6/1/12)

1. We were told at loan origination that we could cancel PMI when we reached 80% LTV
2. We have enough money to pay our loan to 80% LTV
3. I found a statement on the Wells Fargo Home Mortgage website that stated we could request cancellation of PMI when we reached 80% LTV
4. I called a customer service rep to confirm, but was told we needed to get to either 78% LTV or 75% LTV with appraisal (???).  I was told to fax Resolutions to ask about the 80% requirement.
5. I researched the HPA and verified that I could request PMI cancellation at 80% LTV.  I also found that HPA requires evidence of a type established in advance that property value has not declined.  Not only was the evidence type not established in the PMI disclosure, but the requirement to provide evidence was made optional.
6. I prepared a fax that included a printout of the Wells Fargo Home Mortgage website where they acknowledge that a borrow can request cancellation of PMI at 80% LTV.
7. I received a form letter telling us that we could remove PMI at 78% LTV (per HPA) or 75% LTV with structural improvements and an appraisal (per investor requirements).  It neglected to mention the 80% borrower-initiated cancellation option allowed by the HPA.  Must have been an oversight...
8. We made a principal curtailment to 80% LTV on 4/30/12
9. We wrote a letter requesting PMI deletion and faxed on 5/8/12.
10. No response after two weeks, so we faxed another request to delete PMI on 5/23/12 and a third request on 5/24/12.
11. WFHM responds on 5/29/12 with the same form letter as 2/7/12.  It does not acknowledge our written request to cancel PMI.  It does not say anything about the option to request PMI cancellation at 80% LTV.  Willfully disregarding law, inept, or clever?

We Wait

Summary

My wife and I are trying to find out if we can remove PMI when we get to 80% LTV.  The HPA says that we can request that, Wells Fargo Home Mortgage's website also says that we can, but a customer service representative says that we need to get to 78%.  I sent a fax to the Resolution Department to see what the truth is.  In the meantime, I get a form letter saying 78% LTV.  This is mid-February, 2012.

Waiting

I'm not too pushy with businesses or other people, so my natural reaction is to wait and allow Wells Fargo Home Mortgage (WFHM) to respond to my fax inquiry sent on February 10, 2012.  We did not get an answer back after a month.  We decide to make a curtailment to 80% and then initiate borrower-requested PMI cancellation per the Homeowners Protection Act (HPA) of 1998. 

On April 30, 2012, we make an extra payment to get our LTV to just under 80%.  Once I verified that the payment has posted and the LTV was under 80%, I drafted a second fax for Resolutions.  It was short and to the point, saying:

We recently made a bulk principal payment on our home loan to reduce our loan to under 80% LTV.  We therefore request cancellation of PMI, per the Homeowners Protection Act.  We meet the criteria under this Act, and on your Web site, for PMI cancellation:

• Single family, owner-occupied residence
• Loan originated after July 29, 1999
• LTV under 80%, based on a recent appraisal of our home conducted less than six months ago for our refinancing

Please remove PMI and re-issue an amended bill for our June mortgage payment.  If you have any questions or need clarification, please feel free to contact me at (xxx)xxx-xxxx or x@x.com.

My wife helped write that.  It seems pretty clear and is absolutely a request to cancel PMI.  We should have this problem licked, right?  We've met the requirements needed by law: 80% LTV, single family owner-occupied, current payments, evidence of a type established in advance that the value of the property has not declined.

Well, that last requirement could be a grey area.  The type was not established in advance (as far as I can tell), and in fact the PMI disclosure says that this requirement is "if requested."  At this point, there hasn't been a request.  In fact, WFHM hasn't even acknowledged that there is an option to request PMI deletion at 80% LTV.

We wrote the letter on May 8, 2012. However, I don't know that it was ever received by WFHM.  So we faxed it again on May 23, 2012.  We sent it one more time on May 24, 2012 because we weren't sure if the fax machine worked on May 23.

But, it looks like we've complied with the HPA.  Will Wells Fargo Home Mortgage comply with the law?

Summary so Far (5/24/12)

1. We were told at loan origination that we could cancel PMI when we reached 80% LTV
2. We have enough money to pay our loan to 80% LTV
3. I found a statement on the Wells Fargo Home Mortgage website that stated we could request cancellation of PMI when we reached 80% LTV
4. I called a customer service rep to confirm, but was told we needed to get to either 78% LTV or 75% LTV with appraisal (???).  I was told to fax Resolutions to ask about the 80% requirement.
5. I researched the HPA and verified that I could request PMI cancellation at 80% LTV.  I also found that HPA requires evidence of a type established in advance that property value has not declined.  Not only was the evidence type not established in the PMI disclosure, but the requirement to provide evidence was made optional.
6. I prepared a fax that included a printout of the Wells Fargo Home Mortgage website where they acknowledge that a borrow can request cancellation of PMI at 80% LTV.
7. I received a form letter telling us that we could remove PMI at 78% LTV (per HPA) or 75% LTV with structural improvements and an appraisal (per investor requirements).  It neglected to mention the 80% borrower-initiated cancellation option allowed by the HPA.  Must have been an oversight...
8. We made a principal curtailment to 80% LTV on 4/30/12
9. We wrote a letter requesting PMI deletion and faxed on 5/8/12.
10. No response after two weeks, so we faxed another request to delete PMI on 5/23/12 and a third request on 5/24/12.

First Form Letter

I received my first of many form letters after I sent my fax on February 10, 2012.  It was dated February 7, 2012, so it was sent by the customer service representative that I contacted first.  I've put a copy of it here.

Form Letter Contents

Thanks for contacting us.  You're covered by the Homeowners Protection Act (HPA) of 1998.   You must fulfill two requirements, then you have two options for PMI deletion.

1) No late payments
2) Loan has aged less than two years

Options

1)  HPA requirement - principal curtailment to 78% LTV
2) Investor requirement - appraisal to show improvements increased value to 75% LTV

English Translation of Form Letter

This form letter was in response to my request for information on cancelling PMI when reaching 80% LTV.  It did not address this topic at all.  Instead, it said that I can get PMI removed if I get to 78% LTV per the HPA.  It also said that we could have PMI deleted via the investor option where we show that we have made enough structural improvements to raise the value so the current LTV will be 75%.  It conveniently neglected the fact that the HPA says that I can request PMI deletion at 80%.  The form letter specifically and intentionally does not mention the 80% PMI deletion option in the Homeowner's Protection Act.

Next Steps

Of course, my wife and I were understandably confused.  We've read the HPA and seen the information on the Wells Fargo Home Mortgage website that says we can request PMI deletion when we reach 80% LTV.  Why did we get a form letter that clearly did not answer my question?  Why did the form letter not explain the 80% option?  Hanlon's Razor says never attribute to malice that which is adequately explained by stupidity.  I'm also a trusting person, so at this point, I just assume that I haven't made myself clear and maybe the fax that I sent to Resolutions will clear things up.

We wait.

Summary so Far (2/13/12)

1. We were told at loan origination that we could cancel PMI when we reached 80% LTV
2. We have enough money to pay our loan to 80% LTV
3. I found a statement on the Wells Fargo Home Mortgage website that stated we could request cancellation of PMI when we reached 80% LTV
4. I called a customer service rep to confirm, but was told we needed to get to either 78% LTV or 75% LTV with appraisal (???).  I was told to fax Resolutions to ask about the 80% requirement.
5. I researched the HPA and verified that I could request PMI cancellation at 80% LTV.  I also found that HPA requires evidence of a type established in advance that property value has not declined.  Not only was the evidence type not established in the PMI disclosure, but the requirement to provide evidence was made optional.
6. I prepared a fax that included a printout of the Wells Fargo Home Mortgage website where they acknowledge that a borrow can request cancellation of PMI at 80% LTV.
7. I received a form letter telling us that we could remove PMI at 78% LTV (per HPA) or 75% LTV with structural improvements and an appraisal (per investor requirements).  It neglected to mention the 80% borrower-initiated cancellation option allowed by the HPA.  Must have been an oversight...

 

Wells Fargo Home Mortgage Resolutions Deptartment

February 10, 2012 - Fax to Resolutions Department

I believe that the Resolutions department is simply a way for Wells Fargo to outlast you.  I wasn't give a phone number.  I was give a fax number.  That's ok.  I prefer to document things in writing anyway.  I think that they are hoping you'll just think its too much hassle and drop your complaint.  And if you don't, they'll bury you with incorrect, misleading form letters until you do.  That's ok.  I'm persistent.  The fax number is 866-278-1179 if anyone is curious.  The downside is that there is no confirmation that faxes were received, which will be an issue later.

So I started my first letter to Wells Fargo Home Mortgage (WFHM).  I'm no author, but I think I stated my case clearly and provided excellent supporting material.  At this point, I researched the Homeowners Protection Act of 1998 (HPA) to see what the law actually said without the bank's filter applied.

Homeowners Protection Act of 1998

I suggest that you read a copy of the HPA, or get a lawyer to read it for you.  There are certain things that a company is obligated to do according to this law, and that I believe WFHM has not done some of these things.  Either because they are incompetent, willfully negligent, cunningly evil, greedy, laxy or all of the above.  Most likely, they realize that most consumers do not know the law, and it is far easier and more profitable for WFHM to ignore them than it is to follow the law.  I.e. it is better business for them to stall, delay, ignore, or not comply.  That is what I believe Wells Fargo is doing with us now.

There are many parts to the HPA, but I am concerned with Section 3: Termination of Private Mortgage Insurance.  In this section, there are two options: Borrower Cancellation and Automatic Termination.  Automatic Termination occurs when LTV is 78% and payments are current.  This is not what we wanted.  We wanted to cancel at the 80% LTV as was told to me at signing, seen by me on the WFHM website, and now found in the HPA.

HPA Section 3

Here is a direct quote of the applicable law.  It's a mouthful, and it's no wonder that Wells Fargo is unable/unwilling to tell me how to remove PMI at 80% LTV.  They might just assume that I won't be able to figure this out.  I'm sure that's the case for the majority of consumers.

SEC. 3. TERMINATION OF PRIVATE MORTGAGE INSURANCE.
(a) BORROWER CANCELLATION.—A requirement for private mortgage insurance in connection with a residential mortgage transaction shall be canceled on the cancellation date, if the mortgagor—
(1) submits a request in writing to the servicer that cancellation be initiated;
(2) has a good payment history with respect to the residential mortgage; and
(3) has satisfied any requirement of the holder of the mortgage (as of the date of a request under paragraph (1)) for—
(A) evidence (of a type established in advance and made known to the mortgagor by the servicer promptly upon receipt of a request under paragraph (1)) that the value of the property securing the mortgage has not declined below the original value of the property; and 
(B) certification that the equity of the mortgagor in the residence securing the mortgage is unencumbered by a subordinate lien.

What does Section 3 Mean?

Let's break it down into English.

(a) BORROWER CANCELLATION...

(a) BORROWER CANCELLATION.—A requirement for private mortgage insurance in connection with a residential mortgage transaction shall be canceled on the cancellation date, if the mortgagor—

This means that PMI will be canceled on the cancellation date if the following 3 conditions are met.  The cancellation date was defined earlier in Section 2.2.A.ii as: "...based solely on actual payments, reaches 80
percent of the original value of the property securing the loan..."  Great - PMI can be cancelled when the loan reaches 80% LTV.  That is what I thought.

(1) submits a request...

(1) submits a request in writing to the servicer that cancellation be initiated;

This section says that I need to tell Wells Fargo Home Mortgage that I want my PMI cancelled.  I can do that.

(2) has a good payment history...

(2) has a good payment history with respect to the residential mortgage; and

This section says that the borrower can't have late payments.  Our four payments so far have been on time.

(3) has satisfied...

(3) has satisfied any requirement of the holder of the mortgage (as of the date of a request under paragraph (1)) for—

This section says that the borrower (me) has satisfied any requirement of the holder (Wells Fargo) as of the date of the request to cancel PMI that

(A) evidence (of a type established in advance and made known to the mortgagor by the servicer promptly upon receipt of a request under paragraph (1)) that the value of the property securing the mortgage has not declined below the original value of the property; and 

Evidence of a type established in advance and made known to the mortgagor by the servicer.  This is interesting.  Let me repeat it.  Evidence of a type established in advance and made known to the mortgagor by the servicer.  Evidence can be an appraisal.  It has to be established in advance of the cancellation date.  That means the borrower HAS TO KNOW WHAT IT IS.  It has to be made known before the request to cancel.  I checked our PMI disclosure documents, and the only thing is says there is:
"The servicer receives, if requested and at your expense, evidence that the value of the property has not declined below its original value, and certification that there are no subordinate liens on the property."

The type of evidence is not established.  In fact, it is clear that the evidence may not be required at all by the  "...if requested..." statement.  Remember this for later.

(B) certification that the equity of the mortgagor in the residence securing the mortgage is unencumbered by a subordinate lien.

This simply means that we need to prove that there are no other liens on the property, like a 2nd mortgage.

The Fax

So now that I've researched the HPA, I wrote a letter for the Resolution Department.  I said that I'd like to pay down principal to 80% LTV so that I could remove PMI, which is what I read I could do on their site.  I quoted their site back to them about the 80% LTV ratio, and even included a printout of the page from their own site.

At this point, I figure the evidence and logic is so clear, that I would immediately receive a response saying that the customer service representative just didn't have the correct information, and of course I would be able to request cancellation of PMI once I paid principal down to 80% LTV.  I have underestimate the will of my opponent.

Summary so Far (2/10/12)

1. We were told at loan origination that we could cancel PMI when we reached 80% LTV
2. We have enough money to pay our loan to 80% LTV
3. I found a statement on the Wells Fargo Home Mortgage website that stated we could request cancellation of PMI when we reached 80% LTV
4. I called a customer service rep to confirm, but was told we needed to get to either 78% LTV or 75% LTV with appraisal (???).  I was told to fax Resolutions to ask about the 80% requirement.
5. I researched the HPA and verified that I could request PMI cancellation at 80% LTV.  I also found that HPA requires evidence of a type established in advance that property value has not declined.  Not only was the evidence type not established in the PMI disclosure, but the requirement to provide evidence was made optional.
6. I prepared a fax that included a printout of the Wells Fargo Home Mortgage website where they acknowledge that a borrow can request cancellation of PMI at 80% LTV

First Contact - Checking with Customer Service

At this point, I felt pretty good after doing my homework about removing PMI at 80% LTV and finding supporting documentation on the Wells Fargo Home Mortgage (WFHM) web site.  I decided to call customer service to confirm that we could remove PMI.  Remember, I like to follow the rules and confirm before doing anything.  Especially since this would be a significant amount of money, and we'd hate to just dump it into principal with no tangible benefit.

On February 7, 2012, I called WFHM Customer Service using 1-800-288-3212.  This may have changed.  The current number on their page is 1-866-234-8271 for Home Mortgage Account Management.

After navigating the phone maze, I was able to talk to a person.  I asked what the requirements were to remove PMI.  I was read a nice script with two options:

1. Make a curtailment (payment) to get principal to 78%
2. Have an appraisal done to show that new improvements have increased value so that current LTV was 75% or less.

I did not get any information about how to cancel PMI when we were at 80% LTV.  Remember, this was written on their own web page; I was just calling to get confirmation.  I guess I've learned not to trust banks.  How right I was.

I asked what the process was to get PMI removed when we reached 80% LTV as described on the WFHM website.  In theory, the customer service rep should have the same information as the web site.  However, I was told either 78% LTV or make improvements to get to 75% LTV.  This was not what I was told before signing the documents.  It also was not what I was reading on the WFHM website.

I about the 80% value in several other ways, perhaps hoping that I would spark a memory.  No luck.  I was finally told to submit a fax to the Resolutions department.  This was not what I was hoping to hear, but it sounded promising.  After all, who wouldn't want a resolution?

Summary so far (2/7/12)

1. We were told at loan origination that we could cancel PMI when we reached 80% LTV
2. We have enough money to pay our loan to 80% LTV
3. I found a statement on the Wells Fargo Home Mortgage website that stated we could request cancellation of PMI when we reached 80% LTV
4. I called a customer service rep to confirm, but was told we needed to get to either 78% LTV or 75% LTV with appraisal (???).  I was told to fax Resolutions to ask about the 80% requirement.

First Step - Gathering Information, Homeowners Protection Act of 1998

I'm generally a rule follower.  I like to do the right thing.  So, when we had enough money to get to 80% Loan-to-Value and remove PMI, I started to do my research.  This was in early February 2012, or less than five months after the origination date (September 26, 2011) of our loan.

The first thing I did was check the information with our account on Wells Fargo Home Mortgage under our escrow account.  I saw a handy link called "Is your PMI required?"  This was exactly what I wanted to see!  I took this screenshot today, so the information is still currently on the WFHM site.

I clicked the link to find out more.  I saw a section that gave a quick summary of the Homeowners Protection Act of 1998 (HPA).  Again, I took this screenshot today, so the information is still on the WFHM site.

I was happy to read the "Is your Private Mortgage Insurance (PMI) required?" section on the WFHM site.  It is a summary of the HPA, which is a law that tries to keep mortgage lenders from screwing consumers over.  I believed that this section confirmed what we were told before signing the loan paperwork, and that we would be able to cancel PMI after paying down to 80% LTV.

In English, it says there are many factors to getting PMI removed that we don't want you to understand, but must mention because of the HPA.

1. HPA says borrowers can request PMI cancellation for loans that:
1. are for single family, owner occupied dwellings.  That's us!
2. originated after July 29, 1999 and have 80% LTV.  Us again!
3. loans before July 29, 1999.... doesn't apply to us
2. Payment history must be good.  At this point, we are four for four on on-time payments.  Looking good!
3. Loan-to-value: borrowers can request cancellation at 80% LTV!  That's what we want!  Also note that automatic termination occurs at 78% LTV.  But we don't want to pay more than we have to.
4. Investor requirements.  This must be were they cover their ass for high-risk loans or other things.  As far as I can tell, there should be no additional investor requirements.

So, it looks like we can request PMI cancellation, and it should be smooth sailing, right?  Of course not!

The next thing that I'll do is call one of the contact numbers to verify that we can cancel PMI once we pay the loan down to 80% LTV. 

Our journey to remove PMI

My wife and I refinanced our home loan on September 27, 2011.  At the time, we didn't quite have 80% LTV, so we had to pay Private Mortgage Insurance (PMI).  Before we signed the documents, we triple checked that we would be able to remove PMI after reaching 80% Loan-to-Value (LTV), which we expected to do after 2011 tax returns.  We were told that we would be able to remove PMI at 80% LTV.

Our loan was sold to Wells Fargo Home Mortgage (WFHM) a month later.  In February, we started the process to get PMI removed.  It has been an exercise in frustration, as Wells Fargo does not appear to be interested in doing the right thing (for me).  Maybe it is the right thing for them.

I want to document the steps that we went through for the record.  We still have not successfully had PMI removed.  I'll explain what we've done so far over the next posts. 

Hopefully, this blog will help others that are trying to get PMI removed from their loans.  I welcome advice from others on what we should do next.  It should sever as a warning for others when dealing with with Wells Fargo.