We've all heard the old saying: No Honor Among Thieves. Judging from our experience with two of America 's premier mortgage lenders, Wells Fargo Home Mortgage and the federally-established Freddie Mac, that saying could read: No Honor Among Lenders. You might think that, after lenders' abusive and unwise practices, fueled by their greed, helped to trigger a financial near-disaster last year, leading lenders such as Wells Fargo and Freddie Mac might have learned something but that appears not to be the case.
What is particularly galling is the blend of incompetence and arrogance exercised by these two giants, who took multi-billions of federal tax dollars from all of our pockets, while dragging their heels on federally-supported and mandated loan modifications and other legal requirements such as the deletion of so-called Private Mortgage Insurance at once when a mortgage loan reaches eighty percent of the full initial value of a home.
Because we still had our former residence in New Hampshire to sell, in a very slow and down market, we tried to apply with Wells Fargo for a loan modification on our new home and residence in Georgia . After four calls to their customer (dis)service staff, none of which produced the requested loan modification application, we finally demanded that their corporate level follow the law and let us apply for a modification, and we finally received the needed application. Still, the Wells Fargo staffer assigned to us tried very diligently to discourage any better loan terms for us, with meaningless statements that there was no plan which would work for us, endless stalling, and imaginary snags.
We finally approached Freddie Mac after we discovered, by accident, that Wells Fargo actually had sold our mortgage to Freddie Mac. We managed to get Freddie Mac toutilize the new federal loan modification program, but they demanded that we extend our mortgage from fifteen years to twenty five years in order to get a reduced interest rate. In other words, Freddie Mac would make up for our reduced interest rate by squeezing payments out of us for another ten years! That is, indeed, a dishonorable act.
Having taught real estate, law, and related subjects for decades, I knew that the so-called Private Mortgage Insurance (PMI) on our mortgage absolutely has to be recalculated at the time of any loan modification, pursuant to the 1998 Federal Homeowners Protection Act, and I asked for that to happen but the request was totally ignored. Once the loan modification was in place, though, I began to raise the PMI issue over and over, with both Wells Fargo and Freddie Mac. Literally dozens of calls, emails, and letters to various Wells Fargo departments produced zero response on PMI deletion which is required by law when our loan reaches 80% of properly-calculated initial value of our new home. Again, I had to escalate the issue to the Wells Fargo and Freddie Mac corporate levels to get any response at all and then that responsewas totally negative, even though PMI recalculation is required by law upon any loan modification like ours.
Here is where the matter of honor should become a prime focus of this situation. The Wells Fargo honcho finally assigned to deal with our PMI issue actually tried desperately to disqualify us for timely and proper PMI deletion by claiming our home in Georgia, where we have lived for nearly two years, was merely a "second home" and therefore not entitled to the protections of the 1998 Federal Homeowners Protection Act. Just as bad, when we asked for information on both firms Errors and Omissions Insurance, which is intended to protect customers in just such cases as this one, that request was ignored by Freddie Mac, and refused by a Wells Fargo top lawyer--which is, indeed, dishonorable.
Upon appealing Wells Fargo's wrongful and improper denials of our rights under the 1998 Act to Freddie Mac, we first found zero response to, again, many emails to many Freddie Mac email addresses. It was only, upon complaining once again to Freddie Mac's top corporate level, that one of their legal eagles was assigned to handle our complaint and the PMI issue. She admitted that even so-called "second homes" are fully covered by the 1998 Act at Freddie Mac but then denied us all of its provisions, such as the required PMI recalculation upon any loan modification, and dropping PMI at true 80% LTV, unless we paid for a new home appraisal an unjustified waste of our money.
And that is where matters stand: no resolution of the PMI issue, no justice, no fairness and no honor at Wells Fargo and Freddie Mac. Instead, there was first endless stalling, and now endless refusals to follow Federal law, specifically 12 USC 4901 and 4902(d). These mega-lenders took mega-billions of our tax dollars, which they now use to abuse the trust of their borrowers, and the public trust as well. We contend that they violate the 1998 Homeowners Protection Act with apparent impunity.