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%.