Wells Fargo scamming us???

[LorenaMarie]

Help! For a little over two years, we have been behind on our mortgage. Sometimes up to 3 months, but usually only 1 to 2 months behind. We would get caught back up, and get behind again (I was out of a job). Well, I found work in July 2011, and we recently got fully caught up (Thank you Lord!).

In order to stay on top of things, I have been sending Wells Fargo two installments per month toward our mortgage. 1/2 of the payment on the 15th, and 1/2 on the first to total a full payment each month.

We received a letter from Wells Fargo this month stating that they don't take partial payments (except that they had no problem taking partial payments while we were behind!). The letter also said we have an unpaid $55.00 charge related to "servicing your loan" and that we would have to call to find out about it.

So my hubby and I decided to try and refinance our mortgage through our bank, USAA. As we were filling out the online forms, we realized that we had paid Wells Fargo $17,000 last year, and less than $3,000 of that went towards principal (interest rates at 6.5%, and does not include the $50 late fees each month which we paid off with our income tax return in February). Needless to say, we were HORRIFIED! Maybe I'm naive, but how can $17,000 in payments equal less than $3,000 in pay off? I understand interest, insurance, taxes, etc., but seriously ... less than $3,000????

So, while we are looking at our past statements, we see charges for some home inspections, about $15-$20 every few months, except we have NEVER had anyone come by to inspect our home, nor has anyone left notification of intent to do so!!!

In addition, we have been charged an additional $20 PER MONTH on our statements. It says, "Additional Fees". There is no explanation of these "fees".

I feel stupid admitting, but month after month I would just throw the statements out because we pay bills online, and we already knew we were behind. I never noticed these "fees" or "inspections" before. Luckily we have access to up to three years of online statements so I trace them back at least that far.

Anyway, does anyone know about invisible home inspections, and how I should approach Wells Fargo about these generic "Additional Fees"? Or how less than $3,000 out of $17,000 actually went to principal??

Nothing like the feeling of being scammed!

Thanks,

LorenaMarie

[bmc100]

Send Wells Fargo a RESPA letter or aka as QWR. Ask for all fees charged during that period. Then ask for the owner of your note. Wait to get a response. If you do not get a letter stating they are in receipt of your letter within 21 days, make sure you keep track. Then Wells has 60 days to respond. If they do not give you anwsers to your questions, then sue them for those fees they charged.

If you do not do this Wells will just string you along and never help you or answer your questions.

I saw some of the same things and sent them a couple letters and the first time they did not answer my questions, so I filed a complaint with the OCC. Then I sent a second letter and they did not send me answers to all of my questions. Now, I am suing them.

How far into the mortgage are you? Ask how they applied your payments.

[LorenaMarie]

We bought our home for $158,000 ... we owe $142,000 left on the house. We've been in the home since May 2005.

[bmc100]

You need to send a written request to get answers to the fees, costs and prinicpal and interest payments. They have 60 days to respond.

[LorenaMarie]

I will definitely try that. Now I need to figure out what RESPA and QWR are. LOL!

[LorenaMarie]

Sorry, I was wrong. Upon double checking, we still owe $147,498.00 on our mortgage. Ugh.

[Denita]

Send the QWR letter. Methuss has one here on this site that is awesome. Use it and taylor it to your situation.

Those "invisable home inspections" go into effect the moment you become delinquent on a mortgage. It is a big profit center for the servicer of your loan - that and any other fee they can tack on. Those inspections are really a drive by by someone with a camera to see if you still occupy the home. (It costs the bank about $2/property and they charge $15 to $20/property.) If the home is vacant, the servicer sends out the property "preservation" department to change the locks on your house while your home is in foreclosure.

The other $20 fee? I don't know. Suffice it to say that servicers love people that are behind in their payments because they make all kinds of additional fees that they don't make if you are current. They collect those fees off the top when the house is foreclosed upon. In our area it is not unusual for the servicer to tack on an extra $100,000 in fees, penalty's, attorney fees, default interest and all those misc $20-$100 fees. I see it all the time.

Send the QWR. They have to disclose to you what each fee was and show your payments and how they were applied etc. It's very powerful.

Edited March 19, 2012 by Denita

[LorenaMarie]

Thank you Denita! Just to clarify, the $15-$20 inspection fees appear to happen whenever we got behind on our mortgage. The $20 "Additional Fees" have been appearing on our statement every month regardless of whether we are behind or not.

[Denita]

Do you pay online or by phone or send a check?

Are they possibly charging you $20/payment for a phone fee?

I'm not defending them by any means at all. I am just trying to think what justification they are going to use for that fee - other than: We want more of your money so here is another $20/month charge!

[TomnTex]

Make sure everything you mail out is sent CMRRR. Get the green card back and file it.

[LorenaMarie]

Denita, we usually make a payment with billpay from our bank acct. Wells Fargo does charge $20 for paying by phone, so we've never done that. Plus this is monthly ... EVERY month.

Good idea Tomntex!!!

[1stStep]

Is this a HELOC?

I know a couple of banks that charge a monthly fee if you have an open HELOC.

[LorenaMarie]

No, no HELOC. This is the original mortgage on the home.

[2ndTimeAround]

.

Help!....

My $00.02

I understand your situation, going to comment on it.

The two years you had rolling 30 to 90 day lates, with most larger banks, your principle loan is frozen, and a separate account was set up until you caught up. Every month the interest, and penalties, make the suspense account go deeper and deeper. Until you get caught up, very little if anything goes towards your principle. It seams unfair, this is the price you pay when you go late on your mortgage statements.

As for you paying bi-monthly, what you need to do is one a full month in advance. That way - there is a full amount to be sent to the investor, instead of a partial payment.

My wife and I had Wells Fargo - myself setup bi weekly installments out of our checking account. That way we had control on how much was being sent. Sending in extra, we paid our home off in 12 years.

I don't know your total situation, other than you being late up to 90 days and your current interest rate is 6.5%.

You mention about trying to refinance with a history of multiple lates with USAA. They are known for VA loans, which these types of loans are not credit score driven. I remember for VA loans you have made satisfactory payments for 12 months after the date of the last late payment.

I would non recommend you do this trying to refinance, because this is probably going to put you into a worst situation, in not cost you more in closing costs. Many people think they can refinance to make their bills lower, what is happening eating away at your equity. What you would pay in closing costs, if you would add that in to you loan. Yourself would lower the net effective rate, and pay off your loan sooner.

Good Luck

[jq26]

Anyway, does anyone know about invisible home inspections, and how I should approach Wells Fargo about these generic "Additional Fees"? Or how less than $3,000 out of $17,000 actually went to principal??

Regarding the inspection fees, that sounds fishy. You must call and see why.

Regarding the small amount of principal reduction, it makes perfect sense. You owe the most in the beginning of a mortgage loan, so the per diem amount that is needed to cover the interest on the loan balance is at its highest point. As you slowly reduce the balance, your payment amount stays the same but the per diem interest needed to cover the declining loan balance goes down, thereby leaving more money for principal reduction.

If you don't like the slow nature of the payback on the 30 year loan, you have two options: (1) shorter loan duration (check a 15yr amortization calculator vs. 30 yr)- leads to higher payment amount AND/OR (2) larger down payment plus same payment amount, reducing principal faster.

To give you an idea on how this works, I refi'ed in late 2010:

1) Original loan was 6.375% 30yr loan. $1550 payment. $200 to principal every month.

2) New loan was 3.75% 15 yr loan. $1505 payment. $900 to principal every month.

I pay $45 less every month thanks to massive interest rate reduction, build $10,000 in equity every year including first year (rather than $2400), and knocked off 13 years of payments.

Lender #1 was not scamming me in any way just like Wells Fargo is not scamming you. The math is what the math is on a 30yr loan, regardless of lender. But lender #2 was simply offering a better deal. You should spend some time with a mortgage amortization calculator playing around with different scenarios- small changes over long periods of time can save you tens of thousands.

[amortgageman]

Thank you Denita! Just to clarify, the $15-$20 inspection fees appear to happen whenever we got behind on our mortgage. The $20 "Additional Fees" have been appearing on our statement every month regardless of whether we are behind or not.

Do you ever see letters from LPS in your mailbox? That is Wells Fargo's third party supposed lender inspection, however it is not in compliance with fanniemae servicing requirements.

What type of loan do you have? Is it Fannie Mae, FHA or VA? That will help as far as possibly getting the fees eliminated.

[2ndTimeAround]

.... You should spend some time with a mortgage amortization calculator playing around with different scenarios- small changes over long periods of time can save you tens of thousands.

Good call Joe..

We don't know the balance, or the interest rate being offered by the new lender.

Here is a link for the OP, they can put in the numbers for themselves.. Simple Mortgage Calculator

Also you bring out a very good point about amortization.

Being that the OP has been in the home since May 2005. Paid Wells Fargo $17,000 last year, divided by 12 months = payment of $1416. Multiply by 30years = $510,000 (minus escrows). The first year of most loans, very little goes to the principle. Years 5 to 7 - the amount paid for both meet the half way point, where there is less for interest, and more paid to principle. Over the life of most home loans, the home owner usually pays 2 to 3 times more than they originally borrowed.

Referring to the suspense account I mention above - once you miss a few payments, then struggling to pay with being months behind. Again very little goes towards the principle.

I agree with you -the inspection fees, that sounding fishy. In the foreclosure world I work in, lenders normally send out an inspector to confirm the condition of property, or confirm the borrower actually lives there. They show up with a camera taking pictures. Last year one of my past clients, this happened to a single mother. She called me freaking out, telling some guy was taking pictures of her though the windows. Being she was local - I drove over her house, the inspector/photographer was gone, but left a note saying he was from the bank.

What don't know what state the OP is in, whether or not it is a judicial or non-judicial state. Judicial states require the lender to go through the court system to foreclose on a homeowner. This can take over a year. In non-judicial states, the time for foreclosure is 4 to 5 months. Example Georgia, have witness situations where home owners have had the sheriff knocking on their door on the first day of the 5th month. Point - if it is non judicial state - having a home inspection sounds normal...

..

Edited March 21, 2012 by 2ndTimeAround

[wemmington]

"Maybe I'm naive, but how can $17,000 in payments equal less than $3,000 in pay off? I understand interest, insurance, taxes, etc., but seriously ... less than $3,000????"

Ok yes you are naive and as far as how much goes to principal if you took 2 seconds and googled Amortization schedule Calculator you would know where your money is going. You can blame the lender for this all you want but you need to look at yourself, for christ's sake you admit that you have consistently been behind and now you think your being scammed? I think your scamming wells fargo.

And one more thing as far as your comment

"In addition, we have been charged an additional $20 PER MONTH on our statements. It says, "Additional Fees". There is no explanation of these "fees""

just a guess it's prolly a bs fee for being behind on your payments and that to me is more than reasonable considering you owe the money and if someone lost their job it's not the lenders fault so wtf it I was the lender and someone was behind on their payment I would charge the double till they got caught up. btw this 20 fee is prolly in the 30+ mortgage contract you signed without fully reading or understanding so please quit blaming others and just take responsibility for f sake.