Sunday, February 13, 2011

Review: Refinancing with Wells Fargo Home Mortgage

My wife and I recently refinanced our mortgage, and our lender, Wells Fargo, just sent us a survey to rate its performance.

Thanks for asking, Wells Fargo. All in all, I'd have to give you a C-minus.

First, the positives: In the end, the loan was successfully completed, and we got a pretty good rate. I was also pleased that our loan representative, Eric Sevilla, was generally accessible by phone and email during the process. On one evening, I even spoke to him while he was going to a school event for his daughter.

Now the negatives:

First, it took way too long. From the time we applied to closing took 88 days – nearly three months. I have bought six homes in my lifetime and refinanced numerous times but I have never had a loan closing take anywhere near this long. The length may be due to new procedures banks have instituted since the real estate collapse to sift out questionable loans, but my wife and I have excellent credit and significant equity in our home, so by all standards this should have been a "slam dunk" loan.

While a long closing is frustrating, you might think it would at least result in careful and accurate handling of your loan. After all, if lenders are truly taking their time to thoroughly review applications and not hurrying through the process, they will be making fewer mistakes, right?  Sorry, not in this case. In fact, there was a distressing amount of sloppiness in the handling of our loan.

On three occasions, our Wells Fargo loan processor, Pam Ragonese, requested documents which I'd already sent her. At another point, Pam sent us a document that clearly wasn't meant for us, even though the last name of the parties was the same as ours. When I pointed this out to Pam, all she did was change the first name of one the parties – and then sent it back to me.

As we neared closing, Eric abruptly told me our loan would be required to have an escrow account (which we did not want) "because the current taxes are showing delinquent."  Um, one problem: Our property taxes were NOT delinquent, and they never have been. After I proved this, Eric relented.

With past mortgages, I've always requested a loan amount slightly more than we actually needed, and then had the amount lowered when we got to closing just to pay off our existing loan. This is necessary because the exact payoff amount is hard to determine until you're ready to close.

But this time, Eric said Wells Fargo couldn't lower the loan to match the payoff amount without going back to the loan review process (why lending us less would be an issue is a mystery to me). This created a problem because now Wells Fargo would end up owing us $2,700 at closing, and their rules didn't allow that. They were boxed in by their own rules lowering the loan amount was the obvious thing to do (even the title company handling the closing said so), but Wells Fargo wouldn't. 

The solution they came up with was to pay our property taxes early for us. I requested that they make only a partial payment -- $2,700, just enough so that no payments or refunds would be due at closing. But escrow officer Kristin Hart of North American Title rejected my idea, saying "the tax collector won't allow a partial payment to be made."

This is a good example of why consumers must question everything in the lending process. Quite simply, she was wrong. I only know this because I happen to work close to the Los Angeles County tax collector's office and walked over there and asked them if their office accepted partial payments for property taxes. Absolutely, they said.  But 99% of borrowers would not have been able to do this, and would have just had to take the (incorrect) advice.

On the day before closing, I pointed out to Eric that my wife's name had been misspelled on a closing statement, and I wondered if it was wrong on all the documents. This caused a day's delay, after which I was assured that all the documents had been corrected. Except they hadn't. When we got the closing documents, my wife's name was misspelled on many of them and we had to make manual corrections.

Finally, there was a document that addressed a couple minor items that had shown up on our credit report. Wells Fargo had asked for a explanation and I'd sent them one (actually, I sent it twice), but apparently no one bothered to read it. When the "explanation" showed up in our stack of closing documents it was factually inaccurate and even grammatically nonsensical. And, this time, they got my name wrong.   

Hmmm. perhaps a C-minus is too generous.

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