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