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In my experience, mortgage originators rely on box-checking to get mortgages to pass. They make no decisions; it's an amoral, automatic process which happens to

In my experience, mortgage originators rely on box-checking to get mortgages to pass. They make no decisions; it's an amoral, automatic process which happens to be much less efficient than it could be as the industry clings to the idea that homebuyers need to talk to someone on the phone and the people in seats are actually necessary. Around 2013, WF Mortgage denied me a refinance on a property. It was my primary home (high-rise condo) when I bought it, then it became a rental. The reason for the denial was, my condo unit was in the same building as a hotel (downtown in a city), so it was labelled a "condotel". This was a shock to me. After researching condotels, I explained that the definition did not fit my property, but it didn't matter to WF. This was frustrating to me because WF originated the original mortgage when I purchase the property in 2007, and I never missed a payment. The refinance would lower my payment significantly due to lower interest and a large chunk of the principal that I paid down. They did not care at all. They all but told me to fuck off and stop calling them. It was like they wanted anti customer loyalty. I used Quicken Loans for the refinance--no problems.

mikec3010 8y ago
> due to lower interest well, follow the money. why would they sell you a product that makes them less money if they have a material reason to deny it? Think like an insurance company: if you have a technical reason to deny paying a claim, you should absolutely do so, because it means less money for you (the ins. co).
- lordnacho 8y ago
  This is not logical. WF now makes nothing from the financing of the place rather than simply less than originally. They should understand that there's a market and someone else will do the refi.
  - deleted 8y ago
    [deleted]
  - mikec3010 8y ago
    I missed the last sentence where he said he went with a competitor
- tfigment 8y ago
  That probably works if customer has no other choice. Not familiar with how the numbers work here but it seems like if the customer refinances with another company then there is money left on the table and they just lost out. Also presumably they just burned a bridge with that customer for future financial activity.
- bmasci 8y ago
  Wells Fargo most likely would only make money on the origination and other fees associated with the refi. The vast majority of mortgages are sold to the Fannie/freddies and Wells Fargo doesn't make a dime off the interest. So it would definitely benefit them to do the refi.
- kpwagner 8y ago
  While I don't disagree with your sentiment, I think WF would have done the refi if it met their criteria. The reason: they make a lot of money on new loans (refi or otherwise) due to the loan origination fee. In my case the fee was going to be about $1,500 for a ~$90,000 loan. Since mortgage originators usually process the payments, I assume they get some compensation for ongoing loans. However, my understanding is most mortgage originators don't "hold" the loans. They sell them off, so to speak, to be used as a part of an investment product (e.g. a CDO). Funny thing is, you might invest in a small part of your own home loan via a mutual fund (or pension fund). How screwed up is that! That's the real rotten thing about the industry. No skin in the game.
  - spootie 8y ago
    Did this happen to you? If you or anyone you know lost a home because of Wells Fargo’s error, reporter Deon Roberts would like to hear from you. Contact him at deroberts@charlotteobserver.com or (704) 358-5248.
toss1 8y ago
I've found companies that hold mortgages tend to do that sort of thing -- they really don't get the concept that Steve Jobs & others promoted that 'someone is going to eat your business, so we'd better cannibalize it first'. Trying to get two different refis, different houses, different lenders, the original lender kept stringing me along so long that I'd literally found several better deals, selected one, signed & closed before their refi dept responded with a meaningful contact who could actually move forward with a deal. They had my business by default, all they would have had to do is respond promptly, but I had to say "sorry, you lost". Just myopic. Seems they think if they don't respond, we'll not bother.

mikec3010 8y ago

> due to lower interest well, follow the money. why would they sell you a product that makes them less money if they have a material reason to deny it? Think like an insurance company: if you have a technical reason to deny paying a claim, you should absolutely do so, because it means less money for you (the ins. co).

lordnacho 8y ago
This is not logical. WF now makes nothing from the financing of the place rather than simply less than originally. They should understand that there's a market and someone else will do the refi.
- deleted 8y ago
  [deleted]
- mikec3010 8y ago
  I missed the last sentence where he said he went with a competitor
tfigment 8y ago
That probably works if customer has no other choice. Not familiar with how the numbers work here but it seems like if the customer refinances with another company then there is money left on the table and they just lost out. Also presumably they just burned a bridge with that customer for future financial activity.
bmasci 8y ago
Wells Fargo most likely would only make money on the origination and other fees associated with the refi. The vast majority of mortgages are sold to the Fannie/freddies and Wells Fargo doesn't make a dime off the interest. So it would definitely benefit them to do the refi.
kpwagner 8y ago
While I don't disagree with your sentiment, I think WF would have done the refi if it met their criteria. The reason: they make a lot of money on new loans (refi or otherwise) due to the loan origination fee. In my case the fee was going to be about $1,500 for a ~$90,000 loan. Since mortgage originators usually process the payments, I assume they get some compensation for ongoing loans. However, my understanding is most mortgage originators don't "hold" the loans. They sell them off, so to speak, to be used as a part of an investment product (e.g. a CDO). Funny thing is, you might invest in a small part of your own home loan via a mutual fund (or pension fund). How screwed up is that! That's the real rotten thing about the industry. No skin in the game.
- spootie 8y ago
  Did this happen to you? If you or anyone you know lost a home because of Wells Fargo’s error, reporter Deon Roberts would like to hear from you. Contact him at deroberts@charlotteobserver.com or (704) 358-5248.

toss1 8y ago

I've found companies that hold mortgages tend to do that sort of thing -- they really don't get the concept that Steve Jobs & others promoted that 'someone is going to eat your business, so we'd better cannibalize it first'. Trying to get two different refis, different houses, different lenders, the original lender kept stringing me along so long that I'd literally found several better deals, selected one, signed & closed before their refi dept responded with a meaningful contact who could actually move forward with a deal. They had my business by default, all they would have had to do is respond promptly, but I had to say "sorry, you lost". Just myopic. Seems they think if they don't respond, we'll not bother.