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Tonight, I’m going to grind a personal ax, and it has to do with my new mortgage. Just over a month ago, my wife and I bought our first house, financed through a local bank (Benchmark in Southern Virginia) and underwritten through Crescent Mortgage out of Atlanta. As a firm believer in boycotting the "too big to fail" banks, I thought we had done well.
Imagine my dismay, then, when our mortgage was sold to Wells Fargo after only one payment had been made. Wells Fargo is a bank I would never do business with by choice. The only choice we have is to send 25% of our income to Wells Fargo for the next 30 years – or to abandon the mortgage, give up our new home, and destroy our credit rating.
In the land where the free market is God, how can this practice be accepted? How can it be possible that on the biggest purchase we will ever make, we have no control over the company we use. And why does our society put up with this practice?
Does anyone have any insight into how this practice evolved, whether there’s ever been any politician to address it, and whether there is any recourse whatsoever? I’d love to hear what some of the libertarians think about this.
What’s on your mind tonight?
7 Comments
Not trying to shill for WFC but as a customer, I’ve been pleasantly surprised at their conscientious treatment. They gave me a surprise rate reduction which saves me monthly. Can’t complain about that! Plus the on-line banking helps if you have multiple accounts.
Good luck in your new home. Notwithstanding the vicissitudes of securitization, don’t fret about the bank, concentrate on your own point of view — that sense of self going forward. It’s easier to filter out the noise with a roof over your head…
My sister has a mortgage with Wells Fargo in Santa Maria,California. After talking to several banks(no mortgage companies),she went with Wells Fargo because they were the bank of the developers and they gave her the best(she thought) terms. An escrow account was set up through them for her property tax payments and it was all rolled into one payment each month.
One year later she received a property tax bill from the county which she thought was a mistake. After talking to the bank,she was told that the payment quote that she had been given only covered the property taxes on the empty lot-which is totally insane, since the house was already built on that lot before she entered escrow.
The county of Santa Barbara was very cooperative and let her pay the remaining taxes over a one year period, but the whole thing was very deceitful.
She is now stuck in an underwater mortgage on a house that is worth only 50% of what she paid. They won’t even talk to her about lowering the payment because she pays on time and forget about cramming it down to the present day value. Her only way out will be to walk away and crash her credit and she can’t refinance because the house isn’t worth what it was. Wells Fargo refuses to change the loan to a fixed interest rate.
Because interests rates are low, she is alright at the moment but when they begin to rise, she will become one of those people forced to either cough up tens of thousands of dollars in extra interest or walk away from her dream home and lose her excellent credit rating.
I’m sorry to hear about your problem, Jim. My bank is now owned by JPMorganChase, with whom I’d never do business willingly. Everyone who works there is in their 20′s and they are now called “sales associates”. There are 3 plasma TV’s behind the counter selling “financial products” and I’m inundated weekly with glossy flyers trying to sell me these products. In addition, I’m receiving constant mail explaining to me the new terms of all of my accounts and credit cards with them.
I’d shut them down but the downturn in the economy would make it hard get the credit limits I now have(and won’t use unless in an emergency)
Also this week, I received my 3rd Health Insurance premium increase in 14 months. As I am self employed and have a pre-existing condition, I can’t move away from them. Thanks, President Obama for both Healthcare “reform” and financial “reform”
All I can say is be careful and read all of the fine print in everything they send you. It may look like junk mail but it may not be.
Sorry! That was not a response to person 1597. My Bad!
Jim I won’t bother about my own WF story where they screwed me but I can tell you that in the mortgage papers there was a clause allowing the holder to sell the ‘servicing’ and/or the entire mortgage. When I bought a house back in he 1990′s, I was reading thru the papers and noticed the clause and had it struck before I signed.
But there are so many pages and pages of documents and small print it’s a wonder there isn’t some sort of consumer ‘plain language’ associated with such documents.
You might investigate getting a new mortgage.
Actually, I’ve seen that banks are trying to attract new mortgages, ubetchaiam may have a good idea there. My original little local bank sold out, but kept all the personnel, so now I’m with Chase but with many people I’ve worked with for years.
Here are my particulars regarding dealing with Wells Fargo/Wachovia…
Trustee sale of my ‘former’ home back to bank (REO’d) took place on Feb 16.
Short sale negotiation had been in progress and was seemingly going well.
My housing situation is perhaps a bit unusual in that I had built a ‘granny-unit’ in anticipation of reduced income prior to the downturn and rented out the house… (expressly so as to be able to cover mortgage with my hopefully temporarily reduced income.
When tenant had an accident summer of ’08 which caused a lapse in my ability to make mortgage payments for two months (also provoked by simultaneous revocation of $65,000 HELOC which could have covered the lapse for several YEARS if it had come to that)…
No catch-up forbearance was available from Wachovia (now Wells Fargo) and then once N.O.D. and then foreclosure it was no longer possible to achieve full tenancy though I got partial tenancy (but now at insufficient price to support mortgage).
Naturally no HAMP possibility (though I tried) since my income was obviously insufficient… (THAT’S why I build the granny-unit and moved into it in the first place.)
As early as the Spring of ’09 I told Wachovia I understood their issue and was even willing to relinquish ownership and simply rent as tenant and could rent out whole house easily to a new ‘owner/landlord’ at fair market price.
Bottom line…
I accept bank’s right to make the best of the foolish decisions of us both in the disposition of its asset… I expect and expected no ‘bailout’…
In fact, all-in-all I believe I expect much, much less than the assistance these banks received from their wise and powerful friends in government.
Since my personal goal was merely to retain the right to rent the granny unit I built… and they could easily have had an agreement to receive rents during a process of search for new ownership as far back as early ’09…
And since there’s some fairly big fault that I believe is shared by several banks in this Kafkaesque debacle…
And I’m quite positive I can be helpful in finding a buyer who will want to continue this as a rental… (NO, not as some scam where I secretly am part of the deal except for the right to continue my tenancy at fair rent)…
I’m just not sure how it’s in the bank’s interest to forcibly evict me, my tenants and her 12 year-old daughter (and they’ve been taking good care of the house… gardening, repairs, etc?) during any such search?
I do understand how difficult it must be for these mega-banks to deal with the thousands of situations they must face.
However, the ‘granularity of decision’ that was available to the big banks… (in other words… they had political ability to ‘make their cases’ to those who could be creative with solutions) has not been available to the rest of us.
Whether or not that constitutes an imbalance in due process… I can’t say… I’m not an attorney… though I believe there may be issues to consider… and shall seek to share those considerations via such legal overview as may be available.
But from a political standpoint…
Both party establishments should understand that the ‘bi-partisan’ bias in favor of the TBTF banks is bad for citizens, communities and the nation.
Every case is individual… the ‘one-size-fits-all’ approach (it’s procedurally helpful to the banks to be able to just grind everyone through) is what’s going on here… and I have no doubt there are scoundrels on both sides…
(That’s why some see “every” defaulting homeowner as a high-living scumbags… and others see them as helpless victims… BOTH are undoubtedly true in particular situations.)
This massive indiscriminate’ lumping’ of all the ‘little people’ into one bag for a steamroller of banking convenience… and all done with the approval of both parties, the Obama administration, it’s Treasury and other agencies is very bad for our nation AND the economy… in my opinion. (I hope opposing TBTF banks is not yet considered subversive!)
No victimhood here. No rolling over either.
Though I really want to move on to other things… no kidding. But sometimes ya just gotta stand up for sanity.
Meanwhile… happy to note that my piece:
On Creating Communities
http://culturalengineer.blogspot.com/2009/08/on-creating-communities-part-1.html
is to be re-posted by the Peer-to-peer Foundation while I prepare a series on the Commons-dedicated Account concept for them.
Empowering the Commons: The Dedicated Account (Part I)
http://culturalengineer.blogspot.com/2010/08/empowering-commons-dedicated-account.html
P.S. To all… Don’t let the spreading idiocy from the top turn US into either victims… or patsies for a demagogue (when Establishment institutions prove themselves this unconscionably incompetent… its a prime environment for demagoguery)
P.P.S. Anybody have a cheap place to rent? Preferably either in or near New York or D.C. Could be time for a change of scenery.
All I can say is that in our country business is KING. Under Bush it got worse (and under obama isn’t any better, I don’t think). Does that explain it?