Goodbye, Wells Fargo

I have officially dumped Wells Fargo as my bank.


This was sorta difficult, as the individual front-line Wells Fargo employees with whom I have dealt have been, in every case, really nice, helpful individuals.  (On the plus side, as they were really nice, helpful individuals, they were really nice about the whole leaving thing.)


I dumped them because they screwed up my refinance.  More on that in a moment.


I'm posting about dumping them, though, because, in retrospect, it looks like there was something totally underhanded going on.


It started a few months back, when some dude from Wells Fargo kept cold-calling me to refinance my mortgage.  Which was already with Wells Fargo.  I finally called him back just to stop him from freakin' calling, and he offered a surprisingly good deal.  Surprisingly.  It looked something like this:


- they will refinance my mortgage with a lower rate (and/or shorter term, if I'd like)
- for no costs or fees
- no really, no costs or fees -- not even rolled into the balance or anything


When someone offers me a free lunch (particularly a bank), I am suspicious, so I looked for the catch.  When I couldn't find the catch, I asked why, exactly, Wells Fargo was offering to refinance my mortgage at no cost (when, as far as they were concerned, I seemed perfectly happy with my current Wells Fargo mortgage).


And the dude said there were two reasons, basically.  The first was that rates were really low, and Wells wanted me to refi with them before I refi with someone else.  This struck me as sort of bullshit.  The second was because of the government program, HARP, and that they had to do a bunch of refinances so that they could tell the government they were doing all these refinances like a good little bank.


(OK, I added on that "like a good little bank" bit.)


Now, let me be perfectly clear.  I was not behind on my mortgage and had no trouble making payments.  (Knock wood and all that.)  I knew there were government programs out there requiring banks to help out folks who were underwater on their mortgages (or otherwise being screwed) and I was not one of those folks.  It made perfect sense to me, though, that a bank would -- perhaps instead of offering these refinances to the people who actually needed them -- offer them to their better customers, and then cheerfully report to the government that they did a bunch of refinances.


So I signed up.


Long story short, Wells Fargo screwed up something in the math in my paperwork.  They admitted it was a mistake, but refused to correct it.  (Said there wasn't enough time to correct it before closing and for me to sign it anyway and they'd refund the difference and it was no big deal.)  I did my refi with another bank.  Another bank that actually charged me costs and fees, but gave me a better deal on the mortgage and didn't try to pass it off as a HARP refi when it wasn't.  (When Wells finally realized I was going with another bank, they managed to FedEx me the revised documents before closing anyway.  Of course, I was already committed to the other bank -- having paid them fees -- by then.  And the documents were still wrong.)


Once I closed the loan with the other bank, I closed my accounts at Wells.  


The whole incident was brought back to mind today.  (Someone at Wells sent me a mailing to keep in touch with him and let him know if my mortgage needs change -- this was, ironically, the same dude to whom I said, "I'm giving you the last chance to save me as a Wells Fargo customer by fixing this paperwork," who responded to just sign it anyway.)  And I wondered -- was Wells Fargo totally gaming the system by offering me a HARP refinance?  Were those loans really only for homeowners who were in trouble?


So I looked it up.


This is the HARP page on the Government's Making Homes Affordable website.


Under "Eligibility" it says "You may be eligible for HARP if you meet all of the following criteria"


- The mortgage must be owned or guaranteed from Freddie Mac or Fannie Mae (check)
- The mortgage must have been sold to Fannie Mae or Freddie Mac or or before May 31, 2009 (check)
- The mortgage cannot have been refinanced under HARP previously .... (check)
- The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months (check)


and


- The current loan-to-value (LTV) ratio must be greater than 80%.


Come again?


The current loan to value ratio must be greater than 80%.  In other words, this is for folks who are nearly (or actually) underwater on their mortgages -- when the home's value has declined so much, it only slightly (if at all) exceeds the loan.


Now, when I did the refi with the other bank, it required an actual appraisal (Wells would not have required one for their refi), so I happen to know the appraised value of my home.  And the value has, rather annoyingly, dropped since the time I bought my house.  But, I also bought my house with a fairly significant downpayment (as I'd had a ton of equity in the condo I sold to buy the house).  Result:  my loan to value ratio is about 35%.  On no planet is it over 80%.


And it makes sense that HARP would have this requirement.  After all, according to the government's website, the point of HARP is to help you out "[i]f you're not behind on your mortgage payments but have been unable to get traditional refinancing because the value of your home has declined." 


Clearly, that's not me.  Indeed, I obtained traditional refinancing with another bank with about one phone call.


So, there it is.  Wells Fargo is totally trying to do HARP refinances for people who don't need HARP.  (And in the documents they sent me to sign, they acknowledged the value of my home, so it isn't like I was hiding it from them.)  I suppose there's no harm in a bank loaning money at a good rate (and without costs or fees) to anyone it wants to make those loans to -- but if it's reporting those to the Government as HARP loans (and if government funding breaks are somehow involved), well, that's something entirely different.


But they've all been very, very nice.