Report: #779460

Complaint Review: Wells Fargo

  • Submitted: Wed, September 21, 2011
  • Updated: Sat, September 24, 2011
  • Reported By: Josepk — Manalapan New Jersey United States of America
  • Wells Fargo
    420 Montgomery Street
    San Francisco, California
    United States of America

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In 1992 I was approached by an agent for World Savings Bank with a proposal to have my mortgae rate reduced to 2.5% for 30 years but I must take cashout for this program.  It was a pick a pay program that all I had to do was pay the minimum monthly payment.  My wife was the only person on the mortgage and was told that my credit scores were higher and that they will take her off and add me, without any documents.

After a a whileI noticed that the principal was going up, so I called them and asked why?  I was told that was the program I signed for. I told the that was not my agreement and I want a fixed rate. They told me that it would cost between 9,000 and 10,000 in prepayment penalties. But I can take cashout and remain in said program with no prepay penalties.  This has cost us alot of stress and suicidal thoughts.

I paid my mortgage on time for over 15 years at interest only. My principal never went down.  I recently had my income drop over 50% and went late on the mortgage. They refused me a modification. I am a Disabled American Veterans lfetime member.

I have been trying to sue World Savings/Wachovia/Wells Fargo but I cannot afford to pay a lawyer.

The lawyers I contacted on a contingency basis said I have a great case and they will take it on, only to call me back and say someone in their lawfirm has them for clients and it would be a conflict of interest. But said to keep trying.

I am looking to sue them foe 5,000,000 for all I`ve been put through. I have no money for a lawyer and hope someone reads this and can help us.
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#1 Consumer Comment

Just a few comments

AUTHOR: Robert - (U.S.A.)

From what you wrote you got a type of Mortgage that lets you pick the amount of your payment every month.  With the minimum you HAD to pay being Interest Only.  Now, the bank did approve you for the loan, but the amount of payments was YOUR choice. 

So while the bank MAY be at fault for putting you into this loan, it was your fault because you CHOOSE to pay the minimum.   This is probably your downfall in any court case that you may try and bring.

You may have grounds to get them to refinance or modify your mortgage but getting any additional damages, especially 5 Million dollars is not realistic.  This is also probably more of the real reason why you are not able to find a lawyer to take your case on contingency.

While trying to to do any "armchair quarterbacking", you got this well before the big "housing bubble" in the early 2000's where with the increased equity in your house and the fact that banks were giving away loans like candy(even fixed rate loans).  It seems odd how you couldn't get out of it if you really wanted to.  If I was to guess it would be that going into a fixed rate would have given you security but also would have increased your payments to where you really couldn't afford the payments.
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#2 Consumer Comment

I thought people knew better than to get these loans

AUTHOR: Steven - (U.S.A.)

You are getting what you signed up for. I do remember something going on about interest only mortgages. You "cut your payments in half" by getting a mortgage that you are only paying the interest on. You have never been paying the full mortgage. What were the prepayment terms? If you want money to go toward the principal then you need to pay more than the interest. Try sending a few hundred more dollars and have it applied toward the principal.
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#3 Author of original report

Minimum payment

AUTHOR: Josepk - (United States of America)

The 2.5% you talk about is the minimum monthly payment.

All interest is added to the principal. that`s why I pay interest only at different rate every month, and have not lowered my principal in over 15 yearts.
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#4 Consumer Comment

Interest only

AUTHOR: Dave - (USA)

I paid my mortgage on time for over 15 years at interest only. My principal never went down. 

The reason your principal balance didn't go down is because you were paying interest only.  Many loans like this also have an adjustable rate so if you are still only paying your original 2.5% payment you will still have a balance due which will be added to your loan.

As for a modification why were you turned down.  There are certain criteria that has to be met to be approved for a modification.  Criteria can be different for investor backed loans like Fannie Mae and Freddie Mac loand VS a loan that is actually originated by the lender.

As for the Lawyers, I'm sure they would say you have a great case and were probably counting on you not being able to afford their services.  Even if the case would go to court once the lender presented the mortgage you signed the case is over as it would most likey show you accepted the terms for the initial cheap payment back in 1992 and have had the opportunuity to refinance over the years but didn't.

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#5 Consumer Comment

Try nearby law schools

AUTHOR: voiceofreason - (United States of America)

I don't know how legit your case is, or whether you should even be entitled to relief, but going on the possibility you deserve some, contact universities near you with law schools. Maybe a law student will take them on for you as a project. The banks can be very crafty in locking up many law firms with even the smallest of cases, just to sew them up with that conflict of interest garbage.
That said, you've had this loan for 19 years. It's obviously a balloon payment loan. In 2022 they're going to expect the full principal to be paid. Such a mortgage could be a good idea for someone who doesn't expect to live the full 30 years and doesn't need to leave the house to anyone.
How much a month could you be paying with a 2.5% rate anyway?
You have to understand, your disabled vet status doesn't justify defaulting on a mortgage. What would you have them do? Just write it off and give you the house free and clear? How much more could they possibly lower your payments when you're only paying 2.5% interest only right now?
In fact, even if they did rip up your mortgage, you'd have to pay income tax on that forgiven balance, because that's what forgiven loans are; taxable income! You'd end up losing the house to the feds instead.
Now that said, seeing how the government did so much to help keep these banks from going under, morally I feel the banks ought to have to jump thru hoops to find ways to enable folks like you to at least stay in the homes as long as you need to, even if you do lose title to them.
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