Tuesday, June 2, 2009

Mortgage Refinancing Complete – Wells Fargo Grade - D

Now that my refi is finally complete, I feel comfortable commenting on the dismal performance of Wells Fargo in the refinancing. Time after time, they provided poor customer service and/or failed to act in their own best interest.

With respect to my loan, all I did was convert a variable fixed rate mortgage into a 30 year fixed. I was not looking to cash out. I just wanted to reduce my risk to rising interest rates. Since Wells Fargo already had my mortgage, they should have wanted the same thing.

  1. When we started the process, I was told they would not need an appraisal. Then they decided they needed an appraisal after all.
  2. Frankly, the appraisal was crap (in my favor). If I could sell my home for the appraised value, I would do so today.
  3. Despite perfect credit and income sufficient to support the loan, we offered to put my wife's income into the qualification process. For reasons that still baffle me, Wells Fargo said they couldn't consider my wife's income? WTF??
  4. After the appraisal came in, they said I needed to put $1,000 in equity into the loan to bring the LTV below the threshold for a conforming loan. OK – no problem.
  5. 2 weeks later. I followed up on the loan. By this point the underwriter had changed and he wanted an additional $2,500 towards the first mortgage. When I did the math, they were simply wrong. After about 4 hours on the phone (and numerous failures to call me back), I discovered the problem. They refused to consider any of the payments I had made during the 3 months since my app went in. Furthermore, they insisted the additional principal had to be paid to the 1st mortgage instead of the HELOC. Simply put, their stance was stupid from their own perspective. The HELOC was the riskier loan and Wells Fargo owns it as well. They should have wanted force me to reduce the HELOC, not the first mortgage.


Result of the refinancing: When I bought my home 4 years ago, I was single and expected to be out of the home by now. I selected a 5 year ARM with a 4.7% interest rate. Although my new rate is slightly higher, it is fixed and should protect me from inflation and higher interest rates. With the First Mortgage locked in, I can focus on reducing the HELOC balance.

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