I knew this day would come. The day when an injustice would force me to take my virtual pen in hand and thrust it towards those who dare to test my patience and sanity.

Let me start this story by stating my bias against the mortgage behemoth Wells Fargo Home Mortgage. I come by this bias quite honestly, as my previous dealings with them - as infrequent as they may have been - have always been less than desirable. So much so, that instead of preparing for tomorrow’s Thanksgiving feast - or partaking in an alcoholic beverage or two - I am focused like a laser beam to deliver this tale of woe.

I had a closing today. Perhaps I should say - today was spent at a closing. At least that would be a more accurate description. To Wells Fargo’s credit… it took place on just one day - instead of two or three days, as some of my previous experiences.

It was a miserable end to a saga that started nearly three years ago. In early 2004, I took a listing in a not-so-desirable part of town. I worked hard to get it sold… and eventually did. Well, sort of. For the most part, anyway.

Back then, the Buyer’s lender threw some last minute conditions at the Buyers, and we did a unilateral extension for one week (as provided in the contract) so that the Buyers could clear the conditions. The Buyers complied with the lender’s requests, and we thought we had a clear to close. As fate would have it, the lender’s underwriter was nowhere to be found to sign off on it - so we needed just one more day so that the loan package could be sent to the closing attorney the following day. Without the extension, we would be out-of-contract.

Unbeknownst to me, the Sellers (my clients) had been approached by Wells Fargo for a cash-out refinance loan which would give them some cash to pay off credit cards, buy a car, a new television, etcetera. The deal sounded so good to them - they decided that they didn’t want sell their home anymore. They told me they wanted out of the deal - and I told them that if they did not agree to the extension, they could back out. So they did not agree… and the house did not sell.

For the record - cutting one’s own throat does not make it hurt less. The Sellers were not sophisticated people, and if I would have told them that they needed to sign the extension - they would have done it… no question about it. And I would have been paid handsomely, with both sides of the transaction.

Working for free. What a concept. It wasn’t the first time… and surely won’t be the last. It’s not a goal - but sometimes it can’t be avoided. Such is the life of a real estate agent. C’est la vie.

Fast forward a couple of years. I get a phone call from the wife, “I need to sell the house! Will you help me?”

“Sure, I’ll help you,” I assured her. “When can you and the hubby meet with me?”

“Oh, we got divorced,” she said, “but I got the house in the divorce settlement.”

So I set the appointment, pulled comparables, and started to analyze her local market. The picture didn’t look too bright in her neck of the woods, as prices were stagnant and market times were long. Lots of expired listings. Very few sales. Then I pulled her tax record.

Yikes! The mortgage (that was previously unbeknownst to me) was now jumping off the page to taunt me. And taunt me, it did. I couldn’t believe Wells Fargo loaned them that much money… wait - sure I could - they were still doing that crap back in 2004.

So I listed it for payoff plus brokerage fee, and hoped for the best. She might have been given the house in the divorce… but there was no equity. More like negative equity.

I did get it under contract with a co-op broker… without forcing a short sale… but it wouldn’t appraise for the contract price. At that time, Wells Fargo was not in the mood for a short sale, so back on the market it went. After all - most buyers will NOT buy a home for more than the appraisal.

Meanwhile, the seller was so far behind on her payments - she moved out. Now we have a house with no utilities turned on, trash strewn throughout the house, grass growing knee-high… and to top it off - someone threw a rock through one of the windows. Add to all that - the lender had filed for foreclosure. Not a pretty picture.

The vultures started to circle, as expected. We presented a few low-ball offers which were rejected. Not quickly rejected, mind you. I would send the offer… and Wells Fargo would sit on it for a week or so before they would respond.

The last time around, they took so long - I was starting to get upset. The excuse? “The Seller didn’t sign the offer.” Well she didn’t sign any of the other offers, either… how could she? She didn’t have the money to bring to closing. THEY needed to approve it, first. Then she could sign.

We finally got an offer that Wells could agree to. Although the Buyer was not asking for any concessions, Wells Fargo wanted me to calculate a Seller’s Net Sheet for them. No problem… I drafted it up, and faxed it over with the caveat that I could not ascertain the taxes due - but I would estimate them based on the county tax records. Since Wells Fargo actually PAYS the taxes from the Seller’s escrow account, they know EXACTLY how much the taxes are.

Wells Fargo sent me one of THEIR Seller’s Net Sheet forms for me to fill out - with the brokerage fee cut by 2%, as they told me that they would not agree to a short sale without the agents taking the commission cut. So, in the interest of all parties… we accepted the commission cut and put the home under contract.

Since I had already sold (well, sort of sold) this home before… I knew of a title problem that existed that would need to be corrected - so I told the Buyer’s Agent to get the ball rolling with the closing attorney so that they could order a title search. I told her we needed time to get the title company to bind around this defect on the title. This instruction became a weekly conversation. Every week for six weeks.

Did I mention that the title problem was due to the title work that Wells Fargo ordered on the refi? Or did I mention that the title company Wells Fargo used were so fly-by-night, they were no longer in business? Consider it mentioned.

But I digress. Every time I called the Buyer’s lender, they didn’t have a clue as to what was going on. Both the lender, as well as the Buyer’s Agent, told me that the Buyer is not only an investor, but he is also an appraiser and a ‘hard money’ lender… and he may just decide to bring cash to closing instead of financing. It just depends on the sale of some of his real estate portfolio.

Normally, I would require proof of funds under these circumstances… as well as require a larger earnest money deposit. But since the Seller was not going to be inconvenienced (she had already moved out) nor would she lose any more money (the house was headed for sale on the county courthouse steps) I didn’t push the issue. Sometimes you have to pick your fights carefully. You gain nothing if you win the battle - yet lose the war.

As a side note, in addition to the aggravation regarding the Buyer and their ineffective agent… the Buyer was offering this particular home for sale on his investment website - though he had no authority to do so. In Georgia, you can only advertise a home for sale if you own it… or have an agreement with the owner… for which he did not. On top of everything else, he had some really bogus comps online to support the inflated price he was asking for the property. Not all that easy to explain, if you’re an Appraiser in front of the Real Estate Commission.

When I discovered this, I immediately notified the Buyer’s Agent that her client did not have an assignment clause in the contract, and thus did not have the legal authority to offer this home for sale. I also informed her that as a professional photographer, I was not amused by his theft of my images for his use in the illegal promotion of said property. I ordered them to cease and desist.

For the record - he did not cease the use of my images, nor did he cease promoting the property. So I downloaded documents from his website every week or so, including screenshots. You never know when you might need a negotiating tool in your arsenal… and don’t think for a moment that I wouldn’t break it out, should he try to back out of this deal. I’m a nice guy… but I will fight dirty, if I have to. And this is a fight that could easily cost him his Appraisers license.

Getting back to the events of the day, we scheduled the closing for 10:00 in the morning, as the Seller works the third shift. We were both there at 9:30 ready to go. The attorney faxed the HUD settlement sheet over to Wells Fargo for their review. They found an error with the HUD (which was quickly corrected) and the attorney faxed it back to Wells for their approval.

Wells called back and said that they were not going to approve the payoff because my Seller’s Net Sheet didn’t agree with the HUD. The discrepancy was regarding ~$400 in city taxes - taxes that I couldn’t account for, as I only have access to county tax records - not city tax records. Besides, once again - WELLS FARGO PAYS THE TAXES FROM THE SELLER’S ESCROW ACCOUNT. These taxes should come as no surprise to Wells, if they would only review their own records. Other than the city taxes, my net sheet was within $15 of the actual net proceeds. Close enough, if you ask me. After all - it was an estimate.

So, instead of leaving the attorney’s office by 11:00… I was stuck there all day waiting for Wells Fargo to approve this sale. I called Wells at least four times, and the attorney called them as many times… but they never would return our calls. They just left us there, sitting in the lobby of the attorney’s office all day. No courtesy call - nothing.

We missed lunch. I missed an appointment with my hairdresser for a much-needed and long overdue haircut. The Seller was missing sleep. We finally decided to close in escrow (that’s where we sign everything, but no title is transferred or money changes hands) and we left. A half an hour later, the attorney calls me to tell me I can come back to pick up my paperwork and check.

So here is the kicker: Wells Fargo took a $10,000 hit; the Seller gets a 1099 for $10,000 of income (well, she did get it… and spent it back in 2004); and I got to do twice the work - for one-third of the money… not to mention waiting nearly three years to get paid.

So Happy Thanksgiving to you, Wells Fargo.

I hope you choke on a neck bone.

Posted by Doug Quance on Wednesday, November 22nd, 2006 at 11:15 pm.