Hawaii property tax exemption and Wells Fargo (insurance, mortgage broker)

[terracore]

I posted this on punaweb.org, but as a public service announcement I repeat it here:

I applied through a local mortgage broker specifically because I didn't want to deal with Evil Corporate Banks like Wells Fargo. Unfortunately, within 30 days of getting my mortgage, it was sold to Wells Fargo against my will. While there is nothing I can do about that, I was pro-active in catching and calling them on their Evil Ways.

THE PROBLEM? The Hawaii residence property tax exemption on the house we bought last year just kicked in during this tax cycle so I checked my Wells Fargo escrow to see how they planned to screw me. Sure enough, rather than decreasing my escrow payment, they INCREASED IT a few days before the "new" property tax cycle. So rather than decreasing the amount that was supposed to go into escrow, they jacked it up. I'm sure they would have enjoyed using my money for a full year before sending me the "overage" next July without paying me any interest.

ANALYSIS? There was absolutely no reason for them to increase my escrow payment other than the law allows them to go above and beyond the expected escrow payment by a certain % in order to give them a "buffer" against unexpected increases the first part of the following year. So they took FULL liberty with that, even though the actual obligations went down substantially.

THE RESULT? I'm getting a check in the mail for an existing overage, and beginning next month my mortgage payment goes down.

THE LESSON? Either skip the escrow and pay the insurance/property tax yourself (if you have good savings habits) or be like me and WATCH THEM LIKE A HAWK.

WHAT ELSE? Some of you may have seen my other post where a local title company didn't use the proceeds they got to pay due property taxes and I didn't find out until I got a past-due notice from the county. They made it right by paying it plus the late fee and penalty. Again the LESSON is, assume the worst and ask questions!

[KonaKat]

You didn't think the mortgage broker was going to sell your loan? They all do that; that's why they're brokers and not an actual lending institution. They shop for the best rate for you, the consumer. What made you think they were not going to sell your loan? WF will probably sell your loan too, one of these days. Happens all the time. Glad you were able to get your escrow fund corrected.

[terracore]

Yes a broker is not a bank. They are just a loan officer that represents many banks. However the bank (name escapes me) which issued the loan sold it to Wells Fargo. Basically the first bank was just the black hole for my closing costs to go into.

[whtviper1]

Originally Posted by terracore

Yes a broker is not a bank. They are just a loan officer that represents many banks. However the bank (name escapes me) which issued the loan sold it to Wells Fargo. Basically the first bank was just the black hole for my closing costs to go into.

It doesn't if you use a broker or go directly to the bank for the loan - Most (just about all) get sold. Of the many forms (although far fewer today than 10 years ago) you sign, one of those forms allows the bank to sell your loan.

Here is a good article of what ends up happening to your loan.

http://www.investopedia.com/articles...y_mortgage.asp

[mdand3boys]

I really don't believe that your rant on Wells Fargo for trying to protect their interest in the escrow account is valid.
You complained and they made it right? Why then go onto forums and rant that they are "evil"?

How much extra a month were they asking from you? How much interest would they have actually got from you over a years time, with you adding just a few $ a month extra to the escrow account?

Did they sell the loan - or did they sell the servicing of the loan? There is a difference.

[oregonwoodsmoke]

Originally Posted by mdand3boys

I.............. How much interest would they have actually got from you over a years time, with you adding just a few $ a month extra to the escrow account?

............

My bank, which is a pretty good bank, is paying about 0.09% interest on passbook savings accounts right now. I heard a rumor that one of the on-line banks is paying 0.7% interest right now. I haven't verified that figure, but even if that is really available, the interest on a few hundred dollars isn't going to be much.

With a mortgage, the bank is pretty much going to have their way. You take the money and accept the terms and the hassle, or else you refuse the hassle and don't take the money.

You've got to watch them. If they do it wrong and you catch it, they will fix it. Sometimes it isn't easy to get them to fix it, but they will fix it.

[Mikala43]

It seems your lack of knowledge on how these things work is the problem here and not any corporation, evil or not.

[terracore]

Originally Posted by mdand3boys

I really don't believe that your rant on Wells Fargo for trying to protect their interest in the escrow account is valid.
You complained and they made it right? Why then go onto forums and rant that they are "evil"?

How much extra a month were they asking from you? How much interest would they have actually got from you over a years time, with you adding just a few $ a month extra to the escrow account?

Did they sell the loan - or did they sell the servicing of the loan? There is a difference.

I don't consider over a hundred dollars a month to be a trivial amount.

I find it sad that my attempt to protect others from this predatory practice is called "ranting". You must work for a bank.

[whtviper1]

I'm not sure if you read the story/link I posted - but that is the nature of home lending - whether you go to the local bank or one of the big banks - you can't avoid getting your loan sold anywhere. The only alternative is to pay cash.

[kauailover]

Wells Fargo usually doesn't re-sell the loans from what I've experienced. Most other banking institutions do re-sell. I have had pretty good dealings with WF and so has a lot of my friends.