Open Letter to the President of Wells Fargo
December 29, 2010
Mr. John G. Stumpf, President, CEO
Wells Fargo
Dear Mr. Stumpf:
I would like to bring to your attention a recently completed short sale that my office was involved with and the extreme problems that we faced with your organization to get this closed. The borrowers name is xxxxx and her account number was xxxxxx.
xxxxxxx contacted my agent, Sheena Snyder, in late February, 2010 to list her home. She had lost her job in July, 2009. She maintained her mortgage by borrowing money from family members and friends. She found a new job in December, 2009 but at a significant salary reduction. She had also suffered a divorce after purchasing the home in July, 2007 for $199,900. She was offered a mortgage reduction but it was not enough for her to maintain the home, so she requested a short sale. At the time we listed the home, she owed $191,000 on the home.
We listed the home for sale on March 3, 2010 at a price of $179,900 and received an offer within 8 days of listing! The offer was for $185,900 with $8,500 toward closing costs. We submitted the offer and then the odyssey began. I called on March 24 and spoke to a representative who told me the file had “mistakenly been sent to modification for set up.” I was further told the file would be sent to the loss mitigation department for review. On April 1, I spoke to xxxxx in the loss mitigation department and was told that the short sale review would take “3-5 business days.” After waiting three weeks for any kind of reply, the buyers withdrew their offer.
We put the home back on the market at the original $179,900 price. On May 11, we were authorized to lower the price to $174,900 and told we could not go any lower with the price. We received a second offer on the home on June 2 for $181,000 with five percent toward closing. The buyers even asked for a August 30 settlement, 90 days! The file was assigned to xxxxxxxx, Loan Adjustor Specialist, FHA Short Sale. My agent communicated with Ms. xxxxxx throughout the approval process, when she would communicate at all. We suffered through lost documents, requests for documentation that had previously been provided, and at no time would she give us a firm date that we could expect to settle on this home.
August 30 came and went; September 30 came and went; October 31 came and went. We were finally told November 12 was the magic day…until November 12. When the settlement company had not received closing instructions by November 10, Ms. Snyder tried to get in touch with Ms. xxxxxx and received an auto-reply email that she would be out of the office on November 11th for Veteran’s Day. Ms. Snyder spent almost 5 hours trying to get in touch with Ms. xxxxxx on Friday November 12th, with no success. After several attempted phone calls and emails to the customer service department, Ms. xxxxxxx and her supervisor, Ms. xxxxxxxx, Ms. Snyder finally received a return phone call from Ms. xxxxxx informing her that Ms. xxxxxx was out of the office. Ms. xxxxxx advised that she would assign it to another loan adjuster specialist and request that it be rushed. Ms. Snyder was contacted within the hour by a new specialist and was told the HUD-1 would be submitted to the settlement department with a rush status and that we should definitely have approval to close by the end of business that day. The buyers and sellers, along with the settlement agent, convened at 4pm. At 7:00, having heard nothing, everyone finally gave up on the hope of settling that evening. By this time, the buyers were furious and I would not have blamed them for walking away from this home. In fact, I wouldn’t have blamed them in August.
On Monday, the process started all over again, but a new twist entered. Ms. Snyder was told that the appraisal had expired and a variance would have to be requested, otherwise a new appraisal would have to be ordered. Finally on Tuesday November 17th, the approved HUD-1 was sent back to the settlement agent with approval. However, it was the HUD-1 that was dated for November 12th, so it could not be used and we had to resubmit for a new date to be approved. Thank goodness common sense finally prevailed and settlement took place on November 19.
This is not the only short sale I have been involved with in which Wells Fargo was the primary lender. NONE have ever gone smoothly but none have ever been this horribly bad.
As someone who deals on the front lines of the housing crisis every day, I would like to offer a suggestion. There needs to be a method to keep people in their homes and stop the short sale/foreclosure madness. Many of the people I meet are in a position to pay for their homes but the loan modification process simply isn’t meaningful enough to matter. Some are doing a short sale because they see that as the only option. Some are simply giving up and walking away. I don’t see an end in sight to this process for years. How many billions will the banking industry take in unnecessary losses before this ends?
Respectfully,
William M. Kellam Jr. Broker/Owner, SFR, SRES, e-PRO