Legal Review

I've been discussing the situation with a lawyer, and he pointed out a class action lawsuit that may be similar.  I don't fall in this class, but maybe some of you do.

http://www.wellsfargopmisettlement.com/

The class period was for loans originating with Wells Fargo between March 7, 2006 and January 1, 2008.  The case was settled January 31, 2013.

We did get PMI removed when we reached 78% LTV, but I still want the extra PMI payments from when we reached 80% LTV to be repaid.  Wells Fargo agreed that they did not properly describe the terms of the borrower-initiated PMI removal option to me, and agreed to return payments based on an appraisal last fall.  At the time, the market was down from my original request, and I told them that this was not a fair agreement. 

Nobody will return my call now to let me know if that option is still applicable.  There was no expiration listed.

An Update

This blog is getting more views per day than I expected.  I moderate comments to keep the spam out, so if you don't see your comment, just wait.  No need to resubmit.

Summary of my situation and tips for PMI removal

• February 2013, I called Wells Fargo Home Mortgage (WFHM) and asked what it would take to get PMI removed when we hit 80% Loan-to-Value (LTV).  I was told that I had to get to 78% LTV.  Which was completely wrong.  I asked for additional guidance and was told to fax their resolution department.
• I faxed the Resolution Department several times asking what it would take to remove PMI at 80$ LTV.  I was told that I had to get to 78%.  I pointed out the wording in the Homeowner's Protection Act.  
• Finally, we paid to 80% LTV in May and sent in a letter demanding removal of PMI per the HPA
• Several more letters come and go telling us that we need to get to 78% LTV.
• I complain to every executive that I can find and start this blog.
• An Executive Mortgage Specialist (EMS) sends a letter shortly after this.  She says that she understands that I am frustrated, but WFHM needs a "current valuation."  She does not acknowledge that PMI can be removed at 80% LTV.
• After getting nowhere, I submit a complaint to the Office of the Comptroller of the Currency (OCC) in August.  A 2nd EMS contacts me, with the same form letter saying that my complain is complex and they need some time.  I should scan these in for the humor.
• After 2 months with the 2nd EMS, he comes back with information from the PMI department.  They will remove PMI if I can get a current appraisal.  At this point, prices have been dropping, and I didn't think that it would make the 80% LTV, unlike February when I first requested.
• Three months after the OCC complaint, OCC forwards it to the Consumer Finance Protection Bureau (CFPB).  This gets me a 3rd EMS, who doesn't know what the first two had done.  I got her up to speed, and then she stopped talking me because they mark the case as resolved after the offer.

At no point did WFHM acknowledge that they were lying/misleading customers/incompetent.  Their final offer was for me to get an appraisal more than six months after I first requested directions on how to remove PMI.  I found this to be unacceptable, but I don't have any contact with the EMS anymore because they closed the case.  I guess I could open another complaint.  Now that prices have gone up again, an appraisal would certainly prove that the value had not dropped.

We did get to 78% LVT last year, and WFHM did remove PMI at that point and close our escrow account.  That had its own minor hiccups.

My tip is to read the Homeowners Protection Act.  You can request PMI to be removed if you meet certain conditions.  The HPA says that if you make a written request (and you meet the minimum requirements), are current, and have a good payment history, then the last condition is:

the borrower satisfies any requirement of the mortgage holder for: 

(i) evidence of a type established in advance that the value of the property has not declined below the original value; and (ii) certification that the borrower’s equity in the property is not subject to a subordinate lien

My point is that WFHM did not requested this evidence until months after I originally requested to remove PMI.  Further, it is made optional in my PMI disclosure for this loan.  They also did not respond within 30 days of my request to have PMI removed.

Any lawyers out there?

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%.