Wells Fargo Sucks – A warning to new customers.
It all begins.
Last year I decided to build a home, and be the general contractor. A contractor I knew well recommended his “good buddy” at Wells Fargo for the construction loan. He said they worked very well with Owner-builders. I called up the loan agent, and indeed it seemed like an unusually smooth process for an owner-builder. So I made the commitment. During the construction process everything went smoothly and the local branch employees were great to work with. There were a few extra fees added on to the loan, but that seems to be pretty much standard practice everywhere.
It is after the construction loan converted to the 30-year that the trouble began. In order to get all best rates, discounts etc. I needed to have a checking account from which automatic payments would be withdrawn. No problem there. Well if I wanted to have free checking and free checks, I needed a free savings account… No problem there either. Also in order to avoid mortgage insurance, an equity line of credit was opened up at the same time. So I opened all the accounts and it appeared that everything would go smoothly… and it did for awhile.
Side Note: By the way… if you hate getting lots of crap in the mail… Wells Fargo sends all kinds of it…
The trouble starts:
After the first month’s billing cycle I notice a monthly service charge on the savings account. What the heck? This is all supposed to be free of service charges. So I email customer support via the website. I am subsequently informed that I need to maintain a $300 minimum balance. I responded that I was never this and would deposit at least $300 to meet the minimum requirement, but wanted a refund for the charge. Of course the refund was denied.
OK, one mess up… Maybe I just missed something…, but checking over the paperwork received, I could not see anything noting a minimum balance requirement. And the over-zealous agent never mentioned it either, he just said he need to transfer $20 from my checking account, and we would be set.
After the first month, I paid off the Wells Fargo equity line with an equity line from the home we were trying to sell (much lower interest rate). The Wells Fargo equity line now showed a zero balance.
I had not yet switched over my automatic payroll deposits, so I transferred money to my Wells Fargo checking account to cover the upcoming mortgage payment. And rather than wait around for the auto-withdraw date and be paying interest I deiced to make the payment immediately using the online payment system. I selected the option to apply the payment to my next payment due and clicked submit.
Another note: It takes several days for payments to show up from one account to the other, unlike other banks where it is immediate. I am told this is because the Mortgage division is separate from the other banking divisions…
The payment finally posts, and it posted as a principle payment only! Well dang. So I use the online email system to contact customer service… They don’t give me much of an explanation of why it happened, but after a couple exchanges, they tell me they will have the payment applied as a regular payment…. It takes several days, and finally posts… Then I am informed that it has posted, AND that my automatic payment would still be required as well. What the heck? At US Bank, if I made a payment early, the automatic payment would not be drawn. Rather than go through the hassle of contacting support again, I transferred more money into the account from my savings to cover the upcoming the auto-payment, and besides, it never hurts to pay down the mortgage early.
I made a few more small principle only payments online during the next month, and each time ended up contacting support to have the payments applied properly. I was really starting to get sick of it. Finally our other house sold, so I made a large lump sum payment on the mortgage. This time it took no fewer than 5 email exchanges to get the funds applied properly. The monies sat on the mortgage as “unapplied funds” for several weeks, during which time I paid interest I shouldn’t have been paying.
Another note of annoyance: If you email customer support regarding your mortgage via the website, you get three replies. One saying the normal “We’ll get back with a response as soon as possible”… The other from a live representative saying the request has now been forwarded to the Mortgage division. Then someone from the mortgage division, doesn’t use the online message system, but instead sends you a direct email with the response contained in a password protected pdf file. The password is your loan #. Very annoying! Why don’t they just use the online message system, and who in the heck just carries around their mortgage account #?
The 3rd month comes along, and I get a message on my work phone from the local branch saying that I had over drafted the checking account. I wasn’t using this checking account as my primary yet, so I had no idea what it could be for.
I look online, and see that an automatic payment was made to my equity line of credit… Yes the line of credit with a zero balance for two months… I call the local branch and ask why a payment was made to an account with a zero balance. She to is baffled by the situation, but promises to sort it out for me… She gets back to me and explains that the way interest was calculated at some cut-off period resulted in the interest charges not showing up until 2 months later! I asked how I was expected to know that, and how I was expected to make a payment against a zero balance. She agreed that it was all a bit messed up, and took the effort to get the overdraft fees etc. refunded. I have never over drafted an account in my life, so this was a first for me, and now I see how the fees can spiral out of control, with one fee covering another fee etc.
My payroll checks were now being direct deposited to my Wells Fargo checking account, but I was going to be a couple hundred dollars short for the next auto-draw mortgage payment on the next Monday. So on Thursday I initiated a transfer from my equity line to my checking account, so I would have enough to cover the auto-payment…. Along comes Monday… and I had been assessed a huge overdraft fee… “What the heck”? I ask myself. In looking at the chronological order of transfers, the Equity transfer did not take place until Monday just after the auto-withdraw. Again… at the other banks I’ve dealt with, the transfers are immediate, even if it is on a weekend, and this transfer was initiated on a Thursday! Unfortunately there was no way for me to get these overdraft fees refunded… I finally wizened up and took the step to add overdraft protection based on my equity line.
I used the online banking system to setup overdraft protection and figured it was done… Nope… a week later a bunch of forms come in the mail that I have to fill out, and fax or mail back to Wells Fargo corporate. A minor annoyance I know, but why even have the online process, if it isn’t going to do any good?
So I finally decide it is time to start breaking away from Wells Fargo. I found a great rate with mortgage broker and started the refinance process, and got locked in at the rate for 30 days. All the paperwork was completed on my end and on the broker’s end. However, my Wells Fargo line of credit had an early closing provision that I would be charged a $300 penalty if I closed the account early. Since it had a zero balance, I decided to just leave it open for the next 2.5 years and close it then. So we were just waiting for Wells Fargo to complete their loan subordination paperwork. It took them 3 weeks! I was ready to just close the loan and pay penalty when the subordination was finally completed.
Then at the last minute, they charge a $150 subordination fee! So I am thinking it would have been better to just close the darn equity line since they charge $75 a year to have it open anyway… But what is done is done, and an equity line is always a nice fallback anyway. So I leave it open….
All the refinance paperwork finally gets done, and the funds disbursed, but before this takes effect, I notice ANOTHER FEE has shown up. It was just $10, but still…. another stinking fee without any explanation! Off to email support again…. It was a fee for faxing the payoff statement to the mortgage broker.
The Wells Fargo mortgage finally shows a Zero balance. Whew… Once less thing I have to use them for. Now wait a minute…… What’s this $12 monthly charge on my “FREE” Complete Advantage Checking!!??
Another email to support… I am told that since I closed the mortgage I will now be charged a $12 a month fee on my checking account.
That was the last straw, and I decide to just close everything. I email to confirm that a $300 penalty will be charged for closing the account early, as indicated in my signed loan documents. The representative emails me back and tells me that it will be a $500 penalty!
Let this serve as a warning to others out there considering using Wells Fargo, or to those thinking about getting in with them even deeper.
UPDATE: Jul. 15th 2008
So even though I closed all my accounts with Wells Fargo in May, I still continue to receive tons of crap from them in the mail like account balances for accounts that have been closed. It also took them this long to record with the county the release of all the liens associated with the mortgage and equity line. This made opening a new equity line a real pain in the butt. I’ve received a lot of emails from people who have had similar experiences with crazy and hidden fees.