Hello Sophisticated Spenders!
You’re supposed to trust your bank, right?
Your bank is supposed to have your best interests at heart, right?
Your bank isn’t supposed to cheat you out of money, RIGHT?
Wells Fargo has failed me as a customer and here’s why:
Back in 2011, I wanted to refinance my duplex in Chicago.
I reached out to Wells Fargo because I had an account with them and seemed like a good idea at the time.
I had the best mortgage banker on Earth. The customer service was amazing! I didn’t have ANY complaints in that department.
In April of 2011, I paid $650 for an appraisal because it’s a duplex.
The property appraised for $120,000 and I owed somewhere between $80,000 and $90,000 on the house.
I had 3 mortgages on the property: $58,000 loan (80% of the purchase price); $12,000 balloon payment loan (20% of the purchase price-so I could buy the property with no money down***huge mistake***); and a $22,000 construction loan.
However, in order to refinance an investment property, the loan to value ratio has to be 65%. Which means since the property appraised for $120,000 I can only owe $78,000 on the property.
So my refinance was denied.
They also threw in a few debt to income ratios so my awesome mortgage broker and I came up with a plan for me to pay off as much debt as possible and try the refinance again.
I worked HARD yall!
I paid off stuff to get that number under $78,000!
Here are a few quotes from a few blog posts that expressed my frustrations:
a chat with a friend: on 4/26/2011
me: I am refinancing it now and it’s gonna cost me $8000
me: it appraised for less than what i needed
him: Why not put in the 8K into the principle and lower the payment? Or the payment will be the same?
me: the payment would be the same
me: i’m on hold
me: I’m trying to refinance the place in chicago and running into a few snags
Blog post on 6/6/2011
Let’s start this Monday with some financial goals.
5. Make 2nd attempt at refinancing Chicago property.
Chat with a friend on 9/19/2011
me: i paid off a $12,000 mtg and my car
me: i owed $6000 on the car
her: so the house in chicago is paid for?
you didn’t need to do the refinance?
me: i got rejected again
me: it appraised for half of what it appraised for the last time
me: this really sucks
Blog Post 9/26/2011
So I’ve done a little bit of consolidating last month. I’ve been having a VERY hard time refinancingmy investment property. So I decided to consolidate one of the mortgages and get rid of my car payment. So here is the new breakdown the top 10 people who get money from me each month.
1. Bank of America: $1982-This is for the mortgage on my primary residence. The large figure here includes taxes, insurance and PMI.
3. AFCU: $425-Car payment that will be gone in Oct. I am paying the Benz off after two years. I’ve worked hard for this, I pay extra and throw half of all unexpected dough and bonuses here.
3. TSP: $350-This is the Gov’t version of the 401K. This also doesn’t include the company match-this almost doubles my retirement contribution.
4. Consolidation loan @ 2.85% $320-$12,000 went to HSBC mtg and $5,000 went to AFCU (I will have this loan paid off in 3 years or less!)
5. NHS: $245-Neighborhood Housing Services. This is for an awesome program that gave me a Gov’t grant to completely remodel the Chicago property. They paid for $22,000 and I had to pay $30,000. Not a bad deal for $52,000 worth of work. And the place turned out awesome!
6. Condo Association Fees: $274-Not bad either considering these awesome perks: I don’t have to cut grass anymore, I do very little shoveling, indoor pool, outdoor pool, awesome gym, free abs class at the gym, 40 foot rock climbing wall, monthly parties and awesome neighbors!
7. HSBC Mtg: $167-2nd mtg on investment property. I was young when I bought my first property and I did the whole “no money down” thing. Never do this! Save up at least 3% for a FHA loan if you want to own real estate that badly!
9. Costco Gas: $115-I don’t drive to work but I drive at least once a week for Jazz in the garden. I also try to network in DC a few times a month too!
10. Food: Don’t know how much I spend but I know it’s pretty up there!
There you have it folks. I would love to hear your numbers and see how we compare!
As you can see from those chats and blog posts, my application was denied AGAIN!
I had jumped through all of the hoops presented to me and still came up empty.
In September of 2011, I applied for a refinance the second time. I had to pay $650 for another appraisal.
And this is where I’ll mention the neighborhood the property is in. It is in a not so great neighborhood on the south side of Chicago.
Here’s a crime map of the area (this is the home I grew up in and couldn’t be any more proud of all of my accomplishments).
This time I was told that the property only appraised for $65,000.
Really Wells Fargo!?!?!
I asked how on EARTH could a property’s value have such a drastic change in a span of a few months and was told that my first appraisal wasn’t an actual appraisal, it was just an estimate.
So I asked for my money back since I paid for an APPRAISAL and and actual APPRAISER went to the property the first time and was met with excuses and silence.
That’s when I saw RED.
The redline. Here’s a link to redlining and what that means.
I used to be a realtor. And in normal practice, if a home has been appraised, that appraisal is good for 6 months. My appraisal should have been good because I was using the same bank and everything. I made 2 attempts at a refinance and was told my first appraisal was no good. Which is untrue and disappointing.
Here we are 5 years later and they send me this stupid letter:
This letter brought back all of the pain, anger, frustration and disappointment.
And in my typical writing style, I will express my frustrations with this letter in part 2…tomorrow!
(Click here to read part 2)