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Important Information for Homeowners Philly Man ‘forecloses’ on Wells Fargo

From MSN.Money

When his mortgage lender didn’t respond to his letters, a homeowner got a judgment against it in court. A sheriff’s sale has been scheduled for contents of the loan office.
By Karen Datko on Fri, Feb 18, 2011 11:31 AM
Note to self: When a lender doesn’t reply to your letters asking questions about your mortgage, you can take them to court — and win.

That’s what a Philadelphia man did when Wells Fargo ignored his letters about high-cost insurance the bank required for his home. Now the contents of a Wells Fargo Home Mortgage office are scheduled for a March sheriff’s sale to satisfy the judgment he won.

Here’s a synopsis, based on a Philadelphia Inquirer report and other sources:

Music promoter Patrick Rodgers bought a six-bedroom Tudor (it’s a nice-looking 100-year-old West Philly house) for $180,000 in 2002 and hasn’t missed a payment.

In mid-2009, Wells Fargo insisted his homeowners insurance needed to cover his home’s replacement cost — about $1 million — instead of its much lower market value. That caused his homeowners insurance premiums to double.

Rodgers decided not to renew the higher-cost insurance. As a result, “Wells Fargo bought him so-called forced-placement insurance — a policy that typically costs much more than ordinary coverage and only protects the mortgage-holder’s interests,” the Inquirer explained. It also added $500 to his monthly mortgage payment.

Here’s where the lawsuit came in: Rodgers sent at least four letters to Wells Fargo about the matter over the course of a year and never got a response.

The Real Estate Settlement Procedures Act requires that mortgage companies respond to correspondence within 20 days. Rodgers went to court, and when Wells Fargo didn’t show up — see a pattern here? — he won a $1,173 judgment. He placed a sheriff’s levy on a local Wells Fargo mortgage office.

Wells Fargo eventually sent him $1,173, but still didn’t acknowledge his letters. He has asked for a sheriff’s sale to recover court and related costs. A judge will hold a hearing next week to decide if the sale should proceed.

Wells Fargo has never publically explained why it blew off Rodgers’ letters and says it has since sent a response. “We were surprised to learn about the sheriff’s sale because we sent him the funds and we thought the matter was resolved,” Wells Fargo spokeswoman Vickee Adams said. “We fully expect this to be concluded later this month.”

Rodgers, who called his action a foreclosure of sorts, has a lesson for us all, according to ABC News:

“I think it’s important for people to know this RESPA law exists and if their mortgage company is doing something irregular or shady, you can send a letter,” said Rodgers, who said he did not hire a lawyer. “And if they don’t acknowledge your request, they face damages or penalties.”
Rodgers is now a hero to some for seeking payback. Others point out it was unwise to let the homeowners insurance lapse — even if he didn’t like paying a higher rate. That gave the bank an opportunity to get the very expensive forced-place insurance.

However, Huffington Post reader Barbara Lilly said:

Regardless of who was wrong or right in this scenario, I get a perverse sense of justice that somebody is getting some of their own back against Wells Fargo. So many banks have engaged in truly despicable behavior that it is nice to hear that somebody was cantankerou­s enough to stick it to the bank.

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