MINNEAPOLIS, MINNESOTA -- We believe Wells Fargo Bank (WFB) deliberately and unfairly denied our applications twice to refinance when mortgage rates dropped in order to keep us at our present 6% loan with them. We initially applied in August 2010 and were denied approximately 30 days later with the reason that our debt to income ratio was too high at 55.44%. Subsequently, two WFB loan specialists advised us to reapply after we paid down the equity line we had used for our small business. We paid it down to zero on 9/20/10 (and have not used it since) and started the second application on 9/27/10. Moreover, the loan specialist who took the first application and advised us to reapply sent us an email that he would process a change to an even better rate of 4.5%. We later learned this was never done.
Additionally Wells Fargo Home Mortgage (WFHM) disallowed our monthly rental income of $1,200, stating it's because a renter rents a room in our primary residence. The facts are that this is for a completely separate "granny flat" apartment that has its own entrance and parking. This has been declared as income since our tenants moved in June 2006 and has been declared as rental income on our 1040's every year since 2006, and the rental checks are deposited monthly into our WFB personal checking account.
I sent an email on 1/10/11 to an Executive Mortgage Specialist, Retail - Office of the President for them to answer why this rental income is not verifiable, along with other unanswered questions regarding our two loan application denials.
Then on 12/10/10 (more than 60 days after our second application was started) we were told that we were denied again for the same reason as the first, namely: our debt to income ratio was too high at 82.27%. I asked how that could be since we had paid the equity line down to zero, incurred no other new debt, and do not carry credit card debt. I was told that the amount that Underwriting used for business income was less than half of what figured on the first application.
Additionally, they excluded our monthly rental income of $1,200 stating they cannot use income from "live in boarders" when in fact this income is from a completely separate "granny flat" apartment, the rental income has been declared on every income tax return since 2006, and the rental checks are deposited monthly in our personal WFB checking account. I was told by a WFB representative that "determination of rental income depends on the circumstances."
Therefore, based on these facts and other inconsistencies in the processing of both loan applications that WFB will not explain, we feel that WFB deliberately and unfairly denied our ability to secure a loan when rates were historically low. We further feel certain that based on our excellent credit rating, previously satisfactory banking history with them since 1978, and our low loan to value ratio of our home, that if our mortgage had been with another lender, WFB would have approved us for the loan.
So while we have begun the process again with a different lender, the rates are now higher. Since we are getting close to retirement, we feel that this unfair treatment by WFB denied us the window of opportunity to have a much lower mortgage payment during our retirement years when our income will not only be fixed but reduced.
It is regrettable that our relationship with WFB will be ending on such a sour note but our confidence in them has been irreparably breached. Evidently we were wrong to believe that WFB really cared about its loyal customers since our experience showed us what they really care about is the money. This is written in the hopes that it will spare others from becoming victims of what we perceive to be unfair lending practices on the part of Wells Fargo Bank.