Per the recommendation of my Mortgage Broker, I wrote a very sincere letter outlining my experience with the whole process to remove PMI to the president of WF. I sent the letter along with my appraisal via UPS Overnight and I received a phone call the day after it delivered from my case manager. I was then sent a follow up letter that they received my complaint and were looking into the matter. That was last Wednesday. Fast forward to yesterday we got a letter that we were approved to remove PMI and it went into effect Aug 31st. Just like that! AND, an accompanying letter from the Mortgage Insurance Co with a check refunding last months PMI payment.
So my advice, If you are having any problems with Wells Fargo, write a letter to the president. They will take you seriously. SO STOKED RIGHT NOW!!!
OP:
Sorry so long! I could seriously scream right now.
Some background: I live in HCOL area of So Cal.
2007 -We bought our house for $670k, loan on house was $470K ($200K DP) (30yr fixed 6.25%)
2012 -We had a refinance done valuing our home at $525K (30yr Fixed 4%)
Fast forward to last month. I get a call from our Mortgage broker who works for WF who says we might want to get the ball rolling on having PMI removed. He thinks our area is exploding in value and it's worth a shot to get our house reappraised. The expense would be on us ($350 for appraisal) but PMI is $370/month so it would be a nice reduction. He tells me to call WF CS and start the paperwork process. They send me a letter and this is what the investor requirements were for the eligibility of removal.
"Order an appraisal to verify the current value of your property. The appraisal must show the value of structural improvements made to the property. If the improvements are the sole reason for the increased value of $565,792.79, your LTV will be 80% and the appraisal can be used to delete the PMI. The value of improvements must equal $45,792.79." (The bolded is deceptive and I'll explain why.)
Ok so now reading this I know that I don't have structural improvements worth that much and I know the value of our home has gone up significantly since 2012 just by the market conditions and comparable comps in our area. So I go ahead and order the appraisal and away we go.
Appraisal comes in at $590K. REJOICE! We are so happy!
BUT. I then get a letter from WF that says that because the appraiser said that my increase of value was $45K in structural improvements, I must now show receipts for that $45K of work. That's BS. We had a patio put in and some flooring done (which they don't even count as SI). Where did this appraiser GET that we had that much done to the house when we clearly didn't. Doesn't that mean he did something wrong?
I call WF and ask them basically WTF. They are telling me I have no recourse. Basically I am screwed and unless I sent them a check for $45K OR RECEIPTS, the PMI removable is denied. I argued with them about their verbiage that I bolded and underlined above. To me that is deceptive. Also, why is your Mortgage Broker calling me to get the ball rolling but leave out the Most important part? Shouldn't market conditions decide the value of your home too? I ended up talking to a supervisor and she regurgitated the same thing. "These are Freddy mac ( your investors) requirements." And my argument was "Then why have the wording "IF the improvements are the sole reason for increased value?" WHY even put that in the requirements letter? She agreed that the wording was confusing to the average person. I had even called last month (they record conversations right) and asked this same question and the woman on the phone said that if I just wait until the official 2 year mark, I can resubmit the appraisal and all will be ok." That's exactly what I did and I am still sitting in the same boat.
I am so frustrated, I could scream. What would you do? Is there anyone else I can call outside of WF to dispute this? Am I totally wrong in feeling frustrated? My reading comprehension is pretty good but did I miss something obvious to you?
I am not understanding why you even had PMI in the first place. You bought a home that cost $670K, put down $200K which is over 20%. Did you take equity out when you refinanced?
I am not understanding why you even had PMI in the first place. You bought a home that cost $670K, put down $200K which is over 20%. Did you take equity out when you refinanced?
Nope, did not take equity out. We refinanced to go from 6.25% down to 4%. Then they added PMI because our value dropped due to the market crash. But things are going up all over our area and have been stable for the past 8 months. Which is why my Mortgage Broker talked us into going through the PMI removal process. We BOTH thought it would be a no brainer and now he's even scratching his head as to why they are insisting that we had structural improvements worth $45K. That's NOT why my house is worth more and I never told the appraiser we had that much work done. IMHO, he f'd up. I don't understand why they don't see it this way.
Do you have the information of the first WF mortgage person who contacted you? I would contact them and ask for assistance. Especially since they encouraged you to proceed with the appraisal and did not clarify nor make certain you met the criteria. I would ask if there is an appeals process. Since your appraisal did meet the value required, I can't see why it had to be through a structural improvement. I don't know if it will get you anywhere, but I'd keep trying.
WF insisted that we maintain an escrow account for the first year of our mortgage. We are WF customers, it's our main bank, we had 20% equity at the time of closing and I kept nagging until I got this reversed.
I am not understanding why you even had PMI in the first place. You bought a home that cost $670K, put down $200K which is over 20%. Did you take equity out when you refinanced?
I am not understanding why you even had PMI in the first place. You bought a home that cost $670K, put down $200K which is over 20%. Did you take equity out when you refinanced?
The PMI is based on the LTV at the time of the refinance. It doesn't matter how much equity you had when you purchased. We got bitten by the same thing when we refinanced (had put down 20% in 2007, had to put in an additonal $30K to refinance in order to bring the balance down to 95% LTV in 2013, and STILL had to have PMI because the value dropped so much). I think PP is thinking that if you refinance, you'd have an appraisal that's $590K along with your low mortgage balance, so you wouldn't have PMI on the new loan because the LTV is fine now? Maybe I'm misunderstanding though.
I thought a refi would be easier than fighting with WF since their appraisal came back good on LTV
Do you have the information of the first WF mortgage person who contacted you? I would contact them and ask for assistance. Especially since they encouraged you to proceed with the appraisal and did not clarify nor make certain you met the criteria. I would ask if there is an appeals process. Since your appraisal did meet the value required, I can't see why it had to be through a structural improvement. I don't know if it will get you anywhere, but I'd keep trying.
WF insisted that we maintain an escrow account for the first year of our mortgage. We are WF customers, it's our main bank, we had 20% equity at the time of closing and I kept nagging until I got this reversed.
I have been speaking with my mortgage broker who works for WF and he said at this point, I may need to contact the CA Insurance Commissioner's office.
More importantly, did anyone read that bolded paragraph the same as I did? It said "IF the improvements are the sole reason for the increased value." Doesn't that mean that the appraiser has to state WHAT the improvements were and what the value of each improvement was? I only told him of 2 improvements. Flooring (N/A) and a covered patio in our backyard. Who would ever guess they'd have to come up with $45K of receipts to prove that?
Were you committed to PMI for a specific amount of time?
We had the same statement sent to us (regarding the increase in value to due structural improvements only), when I tried to get PMI removed before our required wait time. Ours is 2 years, so if you did your refi in later 2012, that wait time may be your problem (if you had 2 years, or longer, as well).
Do you have the information of the first WF mortgage person who contacted you? I would contact them and ask for assistance. Especially since they encouraged you to proceed with the appraisal and did not clarify nor make certain you met the criteria. I would ask if there is an appeals process. Since your appraisal did meet the value required, I can't see why it had to be through a structural improvement. I don't know if it will get you anywhere, but I'd keep trying.
WF insisted that we maintain an escrow account for the first year of our mortgage. We are WF customers, it's our main bank, we had 20% equity at the time of closing and I kept nagging until I got this reversed.
I have been speaking with my mortgage broker who works for WF and he said at this point, I may need to contact the CA Insurance Commissioner's office.
More importantly, did anyone read that bolded paragraph the same as I did? It said "IF the improvements are the sole reason for the increased value." Doesn't that mean that the appraiser has to state WHAT the improvements were and what the value of each improvement was? I only told him of 2 improvements. Flooring (N/A) and a covered patio in our backyard. Who would ever guess they'd have to come up with $45K of receipts to prove that?
Sadly, I had to provide the most ridiculous paper trail of shit for our last mortgage. I agree, the appraiser did not help you here.
Did you hire the appraiser independently or was it through WF? I might try to contact the appraiser directly and see if they would reissue a report and not mention any SI.
Sorry, that sucks.
This is the thing that makes me the most upset. We had to use their appraiser. How f'd up is that?
Of course the guy has their interest in mind right?
Were you committed to PMI for a specific amount of time?
We had the same statement sent to us (regarding the increase in value to due structural improvements only), when I tried to get PMI removed before our required wait time. Ours is 2 years, so if you did your refi in later 2012, that wait time may be your problem (if you had 2 years, or longer, as well).
We are committed to 5 years so we have 3 years left. At $370/Mo, that's an extra 13,320 we are paying in on PMI.
My friend's dad does mortgages through a local credit union. I called him up and asked him for advice and he said that I needed to dispute the appraisal. That because it's my property, I have the right to ask him for documentation on how he came up with $45K in structural improvements. He said "Don't let this go. Be a squeaky wheel. They don't care about you."
So damn true and unreal that this shit happens to good paying and honest customers.
Were you committed to PMI for a specific amount of time?
We had the same statement sent to us (regarding the increase in value to due structural improvements only), when I tried to get PMI removed before our required wait time. Ours is 2 years, so if you did your refi in later 2012, that wait time may be your problem (if you had 2 years, or longer, as well).
We are committed to 5 years so we have 3 years left. At $370/Mo, that's an extra 13,320 we are paying in on PMI.
I believe it's 5 years or 20%.... whichever was longer. I'm just not sure why they would bother having you get an appraisal when it hasn't been 5 years yet. I'm also not sure why refi to a lower percent if that meant you had to pay an extra $370/mo for PMI. Without seeing numbers, this doesn't add up. Did it really lower your payments or shorten your term any in the refi? Also, why are they giving you the run around about structural improvements when all that really matters is that the value of your home went up? I've never heard of having to actually spend that amount. It just all seems so weird.
When I was with WF (PDQ) 5 years ago, we couldn't get anything refi'ed that didn't benefit customers somehow and that included PMI added. It didn't matter about improvements or anything. My times have changed.
We are committed to 5 years so we have 3 years left. At $370/Mo, that's an extra 13,320 we are paying in on PMI.
I believe it's 5 years or 20%.... whichever was longer. I'm just not sure why they would bother having you get an appraisal when it hasn't been 5 years yet. I'm also not sure why refi to a lower percent if that meant you had to pay an extra $370/mo for PMI. Without seeing numbers, this doesn't add up. Did it really lower your payments or shorten your term any in the refi? Also, why are they giving you the run around about structural improvements when all that really matters is that the value of your home went up? I've never heard of having to actually spend that amount. It just all seems so weird.
When I was with WF (PDQ) 5 years ago, we couldn't get anything refi'ed that didn't benefit customers somehow and that included PMI added. It didn't matter about improvements or anything. My times have changed.
Our original loan was 6.25% and we still had 10 more years left on the interest only portion of the loan. Matter of fact, doing the refinance our payment went UP. We wanted the lowered interest rate and to start getting some money paid into the loan so that 2.25% was worth it to us. Our Mortgage lender told us that in 5 years we would get PMI removed and at the 2yr mark, we could have an appraisal done that if at 80% LTV we could get it removed. We went through all the necessary steps and then they hit us with this huge road block. Which I think is the most f'd up road block because we had no structural improvements. At this point, I am challenging our appraiser.
Our original loan was 6.25% and we still had 10 more years left on the interest only portion of the loan. Matter of fact, doing the refinance our payment went UP. We wanted the lowered interest rate and to start getting some money paid into the loan so that 2.25% was worth it to us. Our Mortgage lender told us that in 5 years we would get PMI removed and at the 2yr mark, we could have an appraisal done that if at 80% LTV we could get it removed. We went through all the necessary steps and then they hit us with this huge road block. Which I think is the most f'd up road block because we had no structural improvements. At this point, I am challenging our appraiser.
Ohh interest only... I see. I don't know about that 2 year thing. It's been 5 years so things have changed but that didn't exist back then. It was either 5 years or 20%...whichever was longer.
Post by hbomdiggity on Aug 18, 2014 19:03:24 GMT -5
We received the same response from WF when inquiring about removing the PMI. I don't recall "Investor requirements" being something disclosed in our original/closing paperwork (not WF). And since we live in a very non-homogenous area, I don't trust the WF appraiser.
While we have been tempted with the appraisal process, we will be 80% in April and will just request removal then. I don't think my blood pressure can handle what you are dealing with.
We also went through the PMI removal process with Wells Fargo. When we inquired about it, we received similar letter. From my understanding, they don't accept market value increase as the value to remove PMI. There were 2 ways we could do to remove PMI: Send them a check for the difference between 78% of the purchased price and the loan. Or make SI (investor's requirements) and the LTV of the improved house must be at 78%. The appraisal was the first step of the second option to see if the LT new value is at 78% or not. Our was, so we sent a bunch of receipts to prove that we made the SI to increase value of the house.
We read the appraisal report, it said nothing about the value of the SI, it just stated the new value.
ETA: You said this much better than I did, but basically this is exactly what we've been told by Wells Fargo as well (which is really frustrating, because we quickly hit about 70% due to market changes, and are still paying PMI):
We also went through the PMI removal process with Wells Fargo. When we inquired about it, we received similar letter. From my understanding, they don't accept market value increase as the value to remove PMI. There were 2 ways we could do to remove PMI: Send them a check for the difference between 78% of the purchased price and the loan. Or make SI (investor's requirements) and the LTV of the improved house must be at 78%. The appraisal was the first step of the second option to see if the LT new value is at 78% or not. Our was, so we sent a bunch of receipts to prove that we made the SI to increase value of the house.
We read the appraisal report, it said nothing about the value of the SI, it just stated the new value.
ETA: You said this much better than I did, but basically this is exactly what we've been told by Wells Fargo as well (which is really frustrating, because we quickly hit about 70% due to market changes, and are still paying PMI):
We also went through the PMI removal process with Wells Fargo. When we inquired about it, we received similar letter. From my understanding, they don't accept market value increase as the value to remove PMI. There were 2 ways we could do to remove PMI: Send them a check for the difference between 78% of the purchased price and the loan. Or make SI (investor's requirements) and the LTV of the improved house must be at 78%. The appraisal was the first step of the second option to see if the LT new value is at 78% or not. Our was, so we sent a bunch of receipts to prove that we made the SI to increase value of the house.
We read the appraisal report, it said nothing about the value of the SI, it just stated the new value.
I kind of feel that I was deceived in a way. I mean, why would their mortgage guy call me to tell me to get the ball rolling? What's in it for him? I wish they explained it all better when I called to inquire about it. Now I just wasted $350 on an appraisal that would have never mattered.
ETA: You said this much better than I did, but basically this is exactly what we've been told by Wells Fargo as well (which is really frustrating, because we quickly hit about 70% due to market changes, and are still paying PMI):
I kind of feel that I was deceived in a way. I mean, why would their mortgage guy call me to tell me to get the ball rolling? What's in it for him? I wish they explained it all better when I called to inquire about it. Now I just wasted $350 on an appraisal that would have never mattered.
Just to fuck with you? I have no idea...I constantly feel jerked around by them, as well. I agree that the SI wording is very confusing (at best). I don't blame you for being furious about shelling out the appraisal fee, but I'm not sure that you'll ever get that money back from them or any other reasonable solution.
I'd probably talk to a broker about doing another re-fi, if you can get the same rate. It will cost you in closing, but it would still be better than paying another 3 years of PMI (if that's what WF is telling you you'll have to do), and it will hopefully get you away from WF.
Probably but I didn't read our closing docs that closely. I know that sounds terrible but we had a great mortgage broker that was wonderful during the whole process. He told us we could most likely remove PMI in 2yrs and that was promising. Then when he called me a couple months ago I thought we were a good candidate. I mean why call me ya know?
I have a lot of work to do tomorrow in terms of fighting this. Small print legal jumbo or not, they shouldn't have made it sound so easy when I inquired about it on the phone. I have 60 days to challenge the appraisal so I'm going to start there.
Probably but I didn't read our closing docs that closely. I know that sounds terrible but we had a great mortgage broker that was wonderful during the whole process. He told us we could most likely remove PMI in 2yrs and that was promising. Then when he called me a couple months ago I thought we were a good candidate. I mean why call me ya know?
I have a lot of work to do tomorrow in terms of fighting this. Small print legal jumbo or not, they shouldn't have made it sound so easy when I inquired about it on the phone. I have 60 days to challenge the appraisal so I'm going to start there.
I don't think that is terrible. If you read every word at closing, you would be there for a week. I was just thinking it would be a good idea to go back and read the docs now. If the docs say something different than what they are telling you now, it might help you make your case.
There are three options we were given: 1. Wait until 78% LTV from original purchase 2. Before 2 years, show proof of structural improvements that raise value of the home to be at 75% LTV (May be 78% but thought for sure 75%) 3. After 2 years, have the house reappraised and show 80% LTV. The appraisal must be ordered AFTER 2 years (I tried to order now because 2 years is sept 10).
So I'm not sure if you are at 2 years or not, but the 2 year reappraisal option should be in your closing paperwork from the refi.
Post by barefootcontessa on Aug 19, 2014 7:34:09 GMT -5
I hate big banks. I do not understand why an increase in market value -- performed by an apprasier the bank selects -- is not sufficient to remove PMI. If you stopped paying on the loan, the bank would be able to recoup its appraised value. Furthermore, structural improvement do not increase a home value dollar-for-dollar. Is this a WF policy? I would think that federal regulation govern when PMI can be removed.
If you do not get anywhere with WF, I would look into refinancing with another company. Even if you only break even it would seem worth to be free of WF.
More importantly, did anyone read that bolded paragraph the same as I did? It said "IF the improvements are the sole reason for the increased value." Doesn't that mean that the appraiser has to state WHAT the improvements were and what the value of each improvement was? I only told him of 2 improvements. Flooring (N/A) and a covered patio in our backyard. Who would ever guess they'd have to come up with $45K of receipts to prove that?
I read it as they will only remove PMI if the increased value was due to structural improvements. They will not remove PMI if the increased value is due to market fluctuations. Reason being easy come easy go on the market value, but structural improvements are an investment. PMI is there to protect the lender if the market crashes again and you walk away. It makes sense they only want to let you out of it if the property has changed since the original deal.
I would look into refinancing with a different bank. It's a PITA but you said you have $13,000 in PMI left to pay and you can refi for much less than that.
Post by thatgirl2478 on Aug 19, 2014 8:52:04 GMT -5
when we had our mortgage with citibank, they told us that we had to pay PMI until the ORIGINAL loan would have reached 78% LTV. If we wanted to have it removed early - because we paid EXTRA to the principle to bring the LTV down - we had to go through the appraisal process. At that time there was no way on earth we'd come anywhere near the required appraisal price.
ridiculous IMO. I was happy to get a VA mortgage the 2nd time around - no PMI and we didn't pay any extra fees because DH is rated at 70% disabled.