Wells Fargo Bank Sucks!

Thomas C. · 2012-02-10T10:38:52-08:00

I am very upset at Wells Fargo Bank. We had been with the former banks Wachovia etc. since 1989 and NEVER had any late payments on anything! Now Wells Fargo Bank - CEO John Stumpf recently received $25,000,000,000.00 Billion in Bailout Money and has closed our Home Equity Line of credit which was at 2.25% of $100,000.00 (with only $22K owned on it) against our paid for home valued today at $275,000, just because of a short sale on 2 investment property in NC we bought in 2006 and closed on in 2007. Is this right? I have talked to 4 or 5 "Executives at the Bank" ie: Kathy Crowder, Debbie Clausen, Patty Harvey, Leslie Murdock and a few others who all read from the same script saying... we appreciate your many years with the bank but it will take 7 years before the 2 short sales "drop off your credit report and we can re-open your line" It is Bull! All they want to do is to open a new HELOC at some out of this world rate of 12% or so is all. Wells Fargo and John Stumpf CEO, likes to kick you when you are down, even though they took $25 Billion in government bailout money which was mine and yours Taxpayer dollars. Unreal? The housing market dropped 50% and the rental market went down 30% to 40% around Charlotte NC. After almost 4 years of loosing money on 2 properties there and not having tenants we had to short sale them both. One was sold in Jan and if Bank of America approves maybe the other one will be gone in March 2012. Each property is bringing in about 50% or so of what is loaned on it? As this is my first short sale ever......So what happens now? This wrecked our credit score from 815 to 630 (Last time I checked it) John Stumpf the CEO of Well Fargo Bank took $25 Billion Dollars of BAILOUT MONEY and then don't want to lend to people who are able to pay it back. This is why the country is in so much trouble! God Help Us! If something like this has happened to you then, What advice "if any" do you have for me? John Stumpf, CEO of Wells Fargo HITS THE JACKPOT with $25 Billion in Bailout Money - Now what are they doing with it? shhhhh we want tell you? http://www.cbsnews.com/stories/2009/02/09/eveningnews/main4788018.shtml

Thomas C.

OP

Real Estate Investor · Philadelphia, PA · Member since 2011 · 16 posts · 0 votes

14y

Originally posted by J Scott:

Originally posted by Thomas C.:

I am curious that if I have a perfect payment history with Wells Fargo and its former banks since 1990 why would they go out of their way to "randomly check my credit score" and say because of the housing market falling out of my control and having to proceed with 2 short sales, that it would have any bearing on my repaying any money on a HELOC from Wells Fargo?

Your credit score isn't an indication of how good your investments are, it's an indication of how trustworthy you are in terms of paying your debts. The fact that your score is 630 indicates that you aren't overly trustworthy when it comes to paying your debts (and the fact that you did two short sales when it sounds like you could have kept making the payments just solidifies that fact).

So, if you're not trustworthy when it comes to paying your debts, why would a bank choose to loan you money if they had the option not to.

You never answered my question from earlier: Would YOU loan $100K to someone with a credit score of 630?

umm Scott, my credit score was 815 Middle when I opened the Heloc with Wachovia in 2003 not 630. It was dropped to that (I think or lower) since I was not longer able to make payments on the investment properties.

Also the fact that my home is paid for and worth easy today $250K or so as backing versus say $100K (40% of its value) and my DTI is about 32% currently?

Banks aren't in the real estate business, they're in the lending business. They don't want your house, regardless of its value...they just want their payments. And the fact that other creditors stopped getting their payments from you indicates that repaying *ALL* your debts is not the highest priority for you.

[/u]Yes, Banks don't want Real Estate is true, but REO's are full at banks today![u]

I also have not yet or do I know for sure that I will receive "any debt forgiveness" from Bank of America nor Chase, just making an assumption that MAY happen? They may come after me for the difference in my loan amount of $140K and the sales price of $80K on the first property and who knows on the second since its still for sale?

It should be stated in the Purchase and Sale Agreement. Are you working with a good short sale agent to get your sale done? If so, s/he should be ensuring this gets done.

The first house was sold on 1/12/12 by Short Sale Carolina and I re-read the docs and see no mention of it. I called Chase and got passed around to 4 to 6 people and ask, and the "supervisor" of the Short Sale department just said to me the account is closed, and the short sale is over? I ask so are you sending me a 1099 for the difference, and she said she had no clue, and said for me to call customer service, so I really don't know for sure?

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Thomas C.

OP

Real Estate Investor · Philadelphia, PA · Member since 2011 · 16 posts · 0 votes

14y

Originally posted by Cheryl C.:

Thomas,

I have an idea; why not sell that paid for home of yours and pay your debts! That may cure your credit woes. Btw, many (myself included) had heloc's frozen or cancelled and never missed any type of payment in our lives. I'm also sure that many here have lost money on an investment from time to time. Most aren't given the option to stiff someone because they made a stupid decision. Be thankful you are even allowed to do a short and have your debt forgiven, rather than be forced into bankruptcy. If you do not know whether your debt has been forgiven or not, you've got way more problems than can be addressed here.

Cheryl,
Thanks for your input, but even if I was crazy enough to try and sell my home it took me 15 yrs of hard work to pay for my family and I to live in, it would not clear up my credit. The damage has already been done according to Chase, but I have not ask Bank of America, but think maybe they would say the same thing.

Also as I stated Cheryl, the short sale just happened on 1/12/12 so I have not heard anything back from Chase, so I called them and talked to several people in short sales and all I was told is the account it closed.

The townhouse in Calloway Glen in Charlotte, I think we owe about $136K on it and it has gotten one Low Ball offer of $66K so far. So its in the long process.

Again I have only been investing for 8 years and short sales or loosing money in an investment is foreign to me.

On another note, can you tell me Why did your bank cancel your Heloc if you say you never missed a payment in your life?

I had $100K at 2.25% and still owe $23K (most of it from trying to prop up the 2 failed investments in Charlotte which I bought through convergent acquisitions sight unseen and was told they were great investments. Of course hind sight is 20/20 and this was early in 2006 and they were both pre-construction.

Oh well live and learn.

Again thanks for your input and feedback.

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Cheryl C.

Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes

14y

Thomas,

I'm sorry that I was so snarky but your posts left me dumbfounded. BoA either froze or cancelled 4 of my heloc's. Another bank did not renew one. I was told that this was based on falling asset values. I may have triggered it myself by maxing-out 3 of them in November 2008. I wanted to get as much cash out as possible before they were cancelled. Maybe they wouldn't have been cancelled if I hadn't maxed them out. Who knows. They were cancelled/frozen in 2/09.

I've bought a number of shorts and it's my understanding that "forgiving debt" is a major part of the whole negotiation. I find it very surprising that you were not engaged enough to know what happened. You seem like a nice enough guy and I don't know the facts behind your investment decisions, but my ability to obtain great financing has been adversely affected by the ill-advised actions of others.

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J ScottPro Member

Moderator

Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes

14y

Originally posted by Thomas C.:

umm Scott, my credit score was 815 Middle when I opened the Heloc with Wachovia in 2003 not 630. It was dropped to that (I think or lower) since I was not longer able to make payments on the investment properties.

It doesn't matter what your score *WAS*...it matters what your score is. Why should a bank lend based on your previous score when they can make the decision based on your current score?

You are confident that you can continue paying your HELOC, but then again, you were once confident you could repay the full loans on your two short sales, weren't you? That says to those evaluating your credit that you don't have a good handle on whether you will or will not be able to continue paying.

You've lost the trust of your lender. End of story.

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Zachary Dosch

Bismarck, ND · Member since 2011 · 142 posts · 16 votes

14y

If there is a charge off at all for any one of the major banks, particulary at the one that you are trying to borrow from, you goose is cooked. Its the scarlet letter. The only way to mitigate would be to completely pay them back for what you cost them. You don't have to do that so almost nobody does that. Even if you charge off an auto loan, its almost impossible to overcome.

In my opinion, this type of situation is exactly why the term on a loan should never be longer than 5 years at which time the ability to qualify for the loan should be reevaluated. 30 year terms are insanity from a banks perspective.

My guess is to find a newer, smaller bank and develop a relationship with them.

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Thomas C.

OP

Real Estate Investor · Philadelphia, PA · Member since 2011 · 16 posts · 0 votes

14y

Originally posted by Zachary Dosch:

If there is a charge off at all for any one of the major banks, particulary at the one that you are trying to borrow from, you goose is cooked. Its the scarlet letter. The only way to mitigate would be to completely pay them back for what you cost them. You don't have to do that so almost nobody does that. Even if you charge off an auto loan, its almost impossible to overcome.

In my opinion, this type of situation is exactly why the term on a loan should never be longer than 5 years at which time the ability to qualify for the loan should be reevaluated. 30 year terms are insanity from a banks perspective.

My guess is to find a newer, smaller bank and develop a relationship with them.

Zach,

First thank you for your feedback, it is appreciated along with the other posters as well. I love the "sounding board" here at Bigger Pockets. Its just like sitting around a table at a restaurant or bar with some fellow investors and saying " hey guy/girl I was wondering what do you think about this Real Estate situation or deal" and getting different experiences and viewpoints is nice. Of course some information is good and some is bad, but thats life.

Now the 2 loans I sucured over the phone in early 2006 were for 2 pre construction properties in Charlotte, a SFR 4bed 2.5 bath 2 gar, for $170K - 20% cash down and that loan was with CHASE (which I have 4 MTA loans on other investment properties with them also that are current).

The 2nd Loan was with Bank Of America, on a Townhouse 3 bed 2.5 bath 1gar for $160K - cash 20% down, that I borrowe money on for almost a year to pay the $1,100 a month note on. I even re-fied the loan to drop the rate 1/2 percent when my credit score was over 800 to try to keep the property, but to no avail. The market in some parts of Charlotte has dropped so bad, its tough to sell at what you owe on something and rents have decreased.

In 2005 - 2006 Charlotte was a good solid hot investment area, but like a lot of hot area fell down far. ;-(

The Heloc was started with Wachovia in 2003 for $100K and has been maxed out and payed off at least 2 times since then. Wells Fargo took over a year or so ago and I have had perfect payment history with them, as well as everyone else for years.

When I was bleeding money like someone with a leg cut off at the hip, and had no options other than Foreclosure or as Chase and Bank of America suggested to "request a short sale", I went and had a meeting with the Bank Manager at my local Wells Fargo (yes with a coat and tie on) and explaned the situition in full and I ask him, "Will, this affect my Heloc with Wells Fargo? He said it would not effect it since I had been with the previous banks since 1989 with perfect payment history, and that these were other banks and I was doing all I could do to "cure" the situation.

My mistake was to belive a local Wells Fargo Bank Manger. If I would have know they would shut down a $100K line at 2.25% I may have borrowed the $75K left and invested it into something giving more return.

The bad thing is our home we live in would be on the line if we could not pay.

So right now we owe about $23K at 2.25% and the min payment is $50 a month. (which would take 200 years to pay off at that amount).

So I am going to vist some local creidt unions to see what they can offer me.

I really just wanted to keep the line open to have IF I get a huge tax bill because of capital gains generated from the $150K (or there about) loss to the banks. I am concered I may have to pay 15% cap gain on the $150K "IF the bank writes it off?"

So I would need about $22,500.00 to pay uncle sam I guess in April 2013?

Maybe?

I have just decided to put some money into a .01% savings acct each month and just pay a few hundred a month on the Helco as I was paying as much as $1K a month on it and eating cup of soup, but now I will have to be my own bank.

Lesson learned: CASH IS KING

Thank you all and Happy Investing.

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Zachary Dosch

Bismarck, ND · Member since 2011 · 142 posts · 16 votes

14y

Tom - I totally echo your thoughts on this board. I love how people don't sugar coat anythign and just tell you like it is. I can appreciate that.

Im not totally sure how the capital gains works on a short sale. If anybody can fill us it it would be greatly appreciated.

The reason why I knew so much about the Wells Fargo situation is that I actually used to work for them for a little bit out of high school. I wasn't trying to defend them or anything, just telling you they way they approach the situation. I know Wells Fargo really isn't subjective about anything. Everything is according to policy. Smaller and in particular, newer banks will be more subjective with the situation and if you can develop a good relationship with them, they could give you the benefit of the doubt.

I wouldn't give up - just learn from the mistakes and don't repeat them.

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Thomas C.

OP

Real Estate Investor · Philadelphia, PA · Member since 2011 · 16 posts · 0 votes

14y

Originally posted by Zachary Dosch:

Tom - I totally echo your thoughts on this board. I love how people don't sugar coat anythign and just tell you like it is. I can appreciate that.

Im not totally sure how the capital gains works on a short sale. If anybody can fill us it it would be greatly appreciated.

The reason why I knew so much about the Wells Fargo situation is that I actually used to work for them for a little bit out of high school. I wasn't trying to defend them or anything, just telling you they way they approach the situation. I know Wells Fargo really isn't subjective about anything. Everything is according to policy. Smaller and in particular, newer banks will be more subjective with the situation and if you can develop a good relationship with them, they could give you the benefit of the doubt.

I wouldn't give up - just learn from the mistakes and don't repeat them.

Zach thanks and I plan to learn from this!

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Wells Fargo Bank Sucks!

Wells Fargo Bank Sucks!

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