There's now plenty of reasons for homeowners to get excited about, as Wells Fargo recently announced its plans on refunding their customers who were charged extra fees to give an extension to the rate locks on their mortgages. The extension was caused by the ineptitude of the bank to offer a swift mortgage process to its customers.
Wells Fargo is a bank based in San Francisco and is now under a lot of flak for the scandal it faced regarding the release of fake accounts to their customers. It's good to know that the bank right now is going the extra mile to make their customers happy again by refunding them the money they paid to settle interest rate issues.
Those customers who extended their interest rate locks last Sept 16, 2013, to Feb 28, 2017, will enjoy the refund because Wells Fargo believes that they shouldn't have paid those interest rate fees.
So how did the rate lock work? The rate lock mentioned here will get the lender to guarantee that it will provide the person borrowing money with a mortgage at a specific frequency, which usually is about 4%, in a specified period, which is sometimes around 60 days. When the lock-in period gets extended, extra fees get charged to the borrower. In this case from Wells Fargo, the borrowers were charged with additional costs for an alleged late paperwork, which the borrowers were innocent of.
When the supposed delays were checked, it was proven that it was at the fault of the bank that the delays happened and so the borrowers should not have incurred the fees.
In the article from USA Today, an analysis showed in an official statement that the bank admitted how the rate-lock extension policy set in place last September 2013 was not consistently applied to the customers and should not be something that will cause the borrowers to pay for the mishap. When the customers where being charged exorbitant fees that were not their fault, it was also shown that the extension made to process those requests were not the borrowers' responsibility.
Right now things are getting better with how Wells Fargo conducts their business. Effective this March 1, 2017, customers of Wells Fargo will now expect a change in how the bank will implement their mortgage rate-lock process that helps extend people's mortgage requests.
With the new changes and improvements, Wells Fargo is now able to promise their customers that they're now able to start issuing the refunds above at the end of this year, giving the customers a better way to earn extra money in time for the holiday season.
It's also a relief for the customers who were experiencing the mistakes done by Wells Fargo to expect these refunds. There's about $98 million in rate-lock fees that got assessed for approximately 110,000 loan applications for the more than two years period in question, but the bank said that a substantial number of the fees charged to the customers were not insubstantially charged.
As the result of the substantial charges that were legitimate, Wells Fargo added in their official statement that the amount to be refunded would be expected to be lower than the original discussed amount that the law said needs to be returned. Some of the fees that the bank is supposed to return have already been sent back to the customers, so the money to restore will naturally be lower than the amount agreed in the court case proceedings.
All these things that the bank does to make sure that everything is ethically sound in the processes of their business is an effort by its CEO Tim Sloan to rebuild trust. Nassim Taleb once said that it's easy to steal money from people in billions than in small quantities, and it seems that Tim Sloan's attempt is an effort to offset this claim.
It's also safe to say that these efforts to refund the money are an act of kindness by the bank to its customers whom it wants to serve and satisfy. The trust that comes from this refund will hopefully rebuild the relations between the dissatisfied customers who were disenfranchised by the bank's mistakes.
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