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Wells Fargo Reverse Mortgage Complaints – RELS Appraisal Practices

April 7th, 2011

Wells Fargo News 06/16/2011: Wells Fargo Closes Reverse Mortgage Lending »

Also See “Reverse Mortgage Problems”


We have a problem. My wife and I started a reverse mortgage with Wells Fargo and after almost 65 days, we still didn’t have approval. We called our agent and when he does take the call or calls us back – which is rare – he says everything is fine and we’ll be done soon. I called another company and they gave me a quote that was better than Wells Fargo Reverse Mortgage but they had to transfer some number from HUD before they could get our loan approved. I wrote a letter like they told me we had to do and my new company (not you guys) told me that they would handle it. For the next two weeks I kept getting calls from my new company telling me that they either could not get the HUD number transferred or something from the appraisal company. I called Wells Fargo’s Reverse Mortgage office and they sent me a bad copy of the appraisal on my house but my new company told me that they needed some more things from the appraiser or the company who manages him and they won’t give it to them. In the meantime, I’m finally getting daily calls from the agent I was using at Wells and he’s telling me that the other company can’t perform and I should go back to them. I don’t really want to go back, but I think I might have to just to get my loan closed. How do I know who’s telling me the truth? What do you suggest? – Paul

Hey Paul,

First a little history. When HUD implemented their Appraiser Independence Rule in 2010, it required all originators to order appraisals from Appraisal Management Companies (you can read about that here). This was done to put a similar set of rules in place as the Home Valuation Code of Conduct (HVCC) rules that went into effect earlier for conventional loans sold to investors like Fannie Mae and Freddie Mac. Most companies like ours, use an Appraisal Management Company (AMC) that is approved by the lender where they intend to take the loan, but if they choose to go to another company at a later date, lenders will take the existing appraisal (original with color pictures) as long as it is accompanied by a Certification from the AMC that the rules for Appraiser Independence have been followed.

Enter Wells Fargo. Wells Fargo Reverse Mortgage owns some or all of RELS, the AMC they use solely for appraisals. If you do an internet search, the net is full of articles of lawsuits of people suing RELS and Wells Fargo for different issues and various information cites different percentage ownership of RELS by Wells Fargo, but it seems that a minimum of 49% ownership is not in question, although I cannot confirm this number. At any rate, if you apply for a loan at Wells Fargo, they will use RELS for your appraisal as they profit from the income they receive. The added benefit for Wells Fargo Reverse Mortgage is that they can do to borrowers exactly what you are describing, and we have documented cases of that happening with our borrowers as well.

HUD issues a case number to an originator that stays with the property when an FHA loan is first started. If that originator orders an appraisal, that appraisal is also logged into the HUD system and it too stays with the property, even if the borrower wants to change lenders. HUD does this so borrowers can’t just keep changing lenders if they don’t like their appraisal and the appraisal that is logged into the HUD system stays with the property for many months. Under the HUD rules, once you notified Wells Fargo that you wanted to change lenders, and you wrote a letter authorizing the new originator to receive the existing “HUD Case Number”, Wells Fargo is required to transfer the case number. However, here’s where they thwart the borrowers’ desires. When the new originator contacts RELS to get an original appraisal which is required, RELS tells them that they work only for Wells Fargo since they did the appraisal for them and cannot give them anything. Wells Fargo tells the borrower that they have transferred the Case Number and have nothing to do with it anymore. If the borrower asks for the appraisal for which they paid, Wells Fargo meets the minimum requirements of the law by giving them a poor black and white copy of the appraisal that no lender will use for lending purposes. This goes on for as long as the borrower will allow and in the meantime, the Wells Fargo originator begins calling back offering to now finish the loan in an expeditious manner. Most borrowers finally give in and go back to Wells as they just want to get their loan closed. In fact, we are working on another loan at this very moment where we finally got everything transferred, the original appraiser left off HUD required information and we are going through this exercise. RELS tells us that they can only work with Wells Fargo, Wells Fargo tells us to call RELS. We are about to write to HUD Washington to protest this treatment of borrowers.

So while I cannot vouch for what is happening with your loan now, I can tell you that we have absolutely run into the same roadblocks. What you can do depends on your time frame. Your new originator can contact HUD and with a letter from you stating the circumstances, they may be able help. I do not believe that HUD ever intended for borrowers to be locked into one lender with the Appraiser Independence Rules. I think if this is happening to enough people and they make HUD and their Congressional Representatives and Senators aware of the problems they are having due to Wells Fargo’s and RELS’ unwillingness to work with borrowers and other lenders, and HUD does not plan to eliminate Appraiser Independence, HUD will have to act to set forth and enforce rules for AMC’s to follow if a Case Number is transferred to a new originator/lender.

Have you had a similar problem with Wells Fargo? Leave your comments below!…

“Wells Fargo Reverse Mortgage Complaints” by www.allrmc.com

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26 Responses to “Wells Fargo Reverse Mortgage Complaints – RELS Appraisal Practices”

  1. Robert S. says:

    I mistakenly started the process with Wells Fargo because I banked with them and Wells Fargo reverse mortgage completely low balled my appraisal. Don’t go there! It took almost 6 months to get my reverse mortgage done elsewhere because of the same BS appraisal hold!!! Where is consumer reports on this matter? Where is AARP?!!

  2. Jane Horton-Leasman says:

    Don’t ask for any help from AARP….as they quit representing Senior “problems” with any of their big bank supporters years ago. Seniors have no organization really representing them, as the National Organization for Seniors just seems to be concerned with getting grants for their various “non-profits” supposedly helping Seniors

  3. Althea Turk says:

    My husband and I have tried to get a reverse mortgage and decided upon Well Fargo because they were close to us. The appraiser came back and stated that our home which last year was appraised as over $1million now our the home was $425 K. We have over 5900 square feet of livable space.The basement was not listed. The appraiser used homes that were older and much smaller and fewer amenities for our home. We would like your opinion on how to manage this?

  4. admin says:

    Hi Althea-

    Many properties have lost quite a bit of value over the last few years but almost 60% from last year to this year is not typical and more than likely, one of the two appraisers is off on his/her estimate of value. The first thing to remember is that an appraisal is just one person’s opinion of value. We have had to go back to appraisers to rebut values all too often over the last year and sometimes we’re successful, sometimes the sales just aren’t there for us. But here is what you need to do.

    There are three approaches appraisers use to determine value. The one that is given the most weight for a single family residence is the Sales Comparison Approach. In other words, what are other houses most similar to yours, in your market selling for? This is a good indicator of what an informed buyer would be willing to pay for your home. The appraiser is supposed to find homes in your neighborhood that sold within the last 6 months, the more recent the better. They want the sales comparisons (“comps”) to be as close as possible, and they want to utilize the fewest number of “adjustments” as possible.

    You stated that your appraiser utilized smaller homes with fewer amenities. Not knowing your area, let’s ask a couple of questions. Did he/she do so because there were no other homes in the area of your size and level of amenities that had sold recently available for use, or did he/she just miss some recent sales? Did he/she ignore some recent sales (within the last 6 months) which you feel are much more similar to your property which would support a higher appraised value, choosing the smaller homes instead? Or are there no other sales available and he/she was forced to use the only recent sales which happened to be smaller? To be able to have an appraiser and the Management Company from which he/she received the assignment review the value for possible adjustment, you need to have information about other sales the appraiser did not use that he/she should have used and be able to support your conclusions with current sales data. If you know of houses in your area that sold in the past 6 months or less that are similar to yours, call the realtor who sold it and find out what it sold for and when. This is the kind of information you need.

    Now having said this, I have to warn you that you have a second issue with which you are going to have to contend. The appraisal management company that Wells Fargo typically uses is RELS because they own some or all of the company. RELS will not work with any other originator other than Wells Fargo after they complete the assignment. Wells has your FHA/HUD Case number and that appraisal will now stay with the property for at least 6 months if you cannot get them to move on the value. With the Wells/RELS connection, no other originator can step in and help you with this issue. So even if the sales comparables even exist to rebut the value, so you will have to work with your Wells Fargo Loan agent to try to have the value reviewed.

    Again, the only chance you have of getting an appraiser to consider a different value is if the current sales information does support a reconsideration. An appraisal from last year is not even a relevant issue to try to get a value reviewed. However, in this case, you’re going to have the added concerns about the lender-owned Appraisal Management Company and the inability to get others to step in and help so you really need to get your Wells Fargo Reverse Mortgage Loan Officer involved. I wish you the best.

  5. Chris Harrison says:

    Wells Fargo does not disburse as agreed! Mother in law has the Equity Line Reverse Mortgage: Wells Fargo has put up every type of road block to prevent the disbursement! We are on our 4th request! Planning on taking the nurse, my mother in law in her wheel chair to protest in front of the branch and call the news outlets.

    Wells Fargo as of today has not lived up to the agreement!

  6. admin says:

    Hi Chris-

    The mortgage instruments require the lender to perform certain duties within certain timeframes. Whether she has a line of Credit or a Monthly Payment (monthly payments being tenure or term), the lender must make payments to her in a timely manner as long as she meets the conditions of the mortgage. If she still has funds remaining, is one of the original borrowers, is still living in the home and paying the taxes and insurance then I can think of no reason further disbursements would be withheld.

    According to HUD, any borrowers having complaints about a HECM lender should immediately contact their local Home Ownership Center (HOC or “Hock”). You can find the list of HOC’s on HUD’s website here and if your mother-in-law is wrongfully being denied disbursements, they will get involved. I would encourage you to contact your local office immediately as they will not allow this to continue.

  7. Mary Beth Strauss says:

    It was so frustrating trying to work with Well’s Fargo and their game playing. They took forever and came in at a very low figure for me. As soon as I said how well it was going with All Reverse Mortgage and how much more they could get for me Well Fargo made the same offer. This was months of hearing something else from them, altogether. When the appraiser suggested that there was an illegal add on to my home I was shocked! My home was built in 1941 and with the exception of painting and general maintenance there was never, ever any illegal add on to my propertuy or surrounding area! This had me flabbergasted and it , again, seemed to take forever for them to correct their ridiculously wrongful appraisal. How could any licensed appraiser make such a mistake? The overall situation with Wells Fargo was frustrating and very disappointing. Mary Beth Strauss

  8. Rick says:

    I would like to suggest to anyone who will listen that we in this industry not present any appearances of ill-doing. Mortgage companies owning their own title companies, banks owning their own AMC’s, realtors owning everything they can possibly own, etc. We are already looked upon as a band thieves, why do things that make us look like criminals even more?

    God Bless!

  9. […] to allow borrowers to transfer cases in accordance with HUD guidelines by holding hostage the Wells Fargo-owned Appraisal Management Company (AMC) appraisals. HUD maintained procedures by which borrowers were allowed to change originators […]

  10. Diane Burney says:

    Where can I talk to someone on the phone to file a formal complaint? I was helping my dad with a reverse mortgage in Eugene, Or. The person who was suppose to be assisting my dad would never call him back. My sister tried, and she had the same luck. I found out the name of this representative’s boss and called him to complain. Although he was not much help, he did get her to call me back. When asked why she would not return my dad or sister’s phone call, she said, “he gets so nervous when I talk to him.” I asked her what she thought not returning his calls did! I told her to go through me instead. For months I would try to get things progressing with her, but literally the only times she would call me back was when I would call her boss again and report her! At one point… months after we were in the process, I called her boss, and he told me they had JUST stopped doing the reverse mortgages a day before I called him! When I told him that we had started the process MONTHS ago, he had the representative call me and said if I turned everything in immediately, she would make sure it went through. I had even taken out a loan on my own house (which is NOT through Wells Fargo and was completed within days!) to cover the $12,000 they said they needed to push the loan through. Again I did not hear back from WF, despite multiple calls requesting a call back. The reverse mortgage finally went through to the next department, 9 months after we first started the process. By then, the initial inspection/value of the house had expired, a new one was needed and by then the market had dropped, and I was told I would now need $54,000 to complete the deal!!! When I complained to the representative’s boss, he basically DARED me to contact upper management with the complaint!! Now, I want to know, how do I reach upper management with this complaint against WF? My dad is losing his house over this. He’s been living in it for over 40 years and he’s 70 himself.

  11. beth says:

    There is a lot if inaccurate information here. Lenders are NOT required to use AMCs per AIR and HVCC (no longer in effect). They are required to have policy and procedure in place to keep the “lending division” separate from the “appraisal ordering division.” Wells Fargo mostly utilizes RELs (Appraisal Management Company) which they own or partially own. In my area that will charge the borrower $495+ for the appraisal, pay the appraiser less than 50% of the fee and the rest is retained by RELs. This information is not disclosed on the HUD-1 as they (lenders) are not separately reporting the actual fee paid to the appraiser but are simply lumping the fees into one – how’s that for transparency and disclosure?

  12. Lylia Stevenson says:

    My story is even more bizarre .My husband and I have a reverse mortgage with Wells Fargo/FHA.We were qualified and approved in 2003.I pay my taxes and Insurance policy.We had a puff Back (soot backed up from our boiler recently).Our Insurance gave us some money to clean up the house.We got a check but we cannot cash the check without the approval of Wells Fargo.Imagine that I am allergic to soot and Winter is approaching yet Wells Fargo must give the ok to cash the Insurance check …Believe it or not? Do they want to get a kick back or are the big banks getting crazy.Soon most people will abandon all the big banks and take their savings to the small Credit Union Banks and start a revolution in America.Its too late for us now because we are seniors and have no way of defending ourselves against these Baracudas…

  13. Deborah says:

    My mother is on her 4th request to get funds from her reverse mortgage line of credit. The bank is giving her the run around and at 91 years of age it is very frustrating for her. The bank tells her they are protecting her and making sure she is the one requesting the funds. She had to wait for a pin number to arrive in the mail, then call the bank with the pin number, tell them the amount she wanted direct deposited into her account and now she is waiting on a call back from the bank to “confirm” the amount she is requesting. Insane…..she has given them her name, last four digits of her SSN, birth date, bank generated pin number, account #, address and still they want to CONFIRM HER!

    This is not protecting the elderly its causing undo stress and resentment.

  14. Floyd says:

    My dad had a reverse mortgage with Wells Fargo. He died we got a letter from Wells Fargo stating that they would sell th property for 95% of the current appraised value. I have summited a completed real estate contract with current appraisal. When I call all I get is some one that can’t tell me if they have received the paper work or not. Nothing is moving except the interest and feeds they are charging. What do I need to do to build a fire under them?

  15. admin says:

    Hi Floyd,
    I am sorry you are having a problem and I really can’t comment on Wells Fargo’s loan servicing with regard to an individual or department that may be able to move things along for you. I do know that they will order their own appraisal as well and they are required to notify HUD if your father’s loan was the HUD Home Conversion Mortgage (HECM or “Heck-um”) so they may be in the process of performing those functions. Depending on how long it’s been since you started the process, I would advise you to not stop at the person who answers the phone but to go up the chain of command and not stop until you reach a manager or Vice President who can answer your questions.

    However, if the payoff amount is going to be 95% of the current appraised value due to the fact that the current balance exceeds the current value, there really is no more interest accruing and they cannot charge you any more fees if the sale price will not cover the balance owed on the actual mortgage anyway. They can show any balance they want but they cannot collect it. On a reverse mortgage, they cannot go after any other assets other than the property so no fees or interest can accrue that would cost you or any other heirs any money. If the property is worth more than the current balance, then the entire amount of the reverse mortgage would be due and you would be able to keep any difference so at a 95% of value sales price, that would mean that the balance exceeds the value and therefore, there is no reason for you to be concerned about accruing fees and interest. Wells Fargo should be happy that you are selling the property for them. Most heirs choose to walk from a property when the mortgage balance is higher than the value as they have no obligation to work on the sale whatsoever and the lender cannot seek any other method of repayment other than to take the property and resell it themselves.

  16. Floyd says:

    Thanks, I did call and ask to a supervisor they said one would call me back that was 7 day ago. No one has called. I guess is will call again and request the same. Thanks

  17. Audrey says:

    My Mother in Law recently requested an advance on her line of credit. She sent a letter with all of the pertinant information ie loan number, PIN number her name, DOB and the last 4 of her Soc. Her recent statement received from WF reverse Mtge indicated that she has $28K available on her line of credit. She was requesting $25K They sent her a rejection stating that she only had $5K left. The problem with that is the loan number referenced on the rejection was not even close to her loan number and when we attempted to speak with someone regarding this apparent error, we were met with rudeness and condesension. My mother in law is 95 years old and has difficulty with telephone communication but we have been treated like we are trying to pull some fast one when we try to speak for her, with her on the other line. Once this is resolved, you can be sure that all of our accounts will be pulled from Wells Fargo including our savings, checking, investment and mortgage.

  18. Sala says:

    They are also a rip-off and take advantage.

  19. SIC says:

    I read all the comments and completely agree that Wells Fargo are playing games and the appraisers from the company they own are going out of their way to low ball the appraisals from my experience. In this case, RELS had an appraiser (Weber in Phx, AZ) use single homes built in 1980 who used them as comps for a 2007-2008 luxury condominium in a very prestigious location. When we received the appraisal we both said she was crazy or ignorant. Then when I took the time to analyze her appraisal I found many big mistakes such as using one comp not even in the same zip code while there are comps right next door at comparable prices. Guess she prefer to try to get our value down by half and that was the only way she was going to be able to pull the trick. The 1980 construction vs. 2007-2008 — 27 years later was laughable. If you get this appraiser, refuse to pay if you have the same experience. We informed Wells Fargo that we will not pay for such an incompetent appraisal and will contest if they bill us. After reading all the comments, I am really wondering if Wells Fargo is telling appraisers to low ball — if they are then we have a case for a class action law suit.

  20. William Mcknight says:

    Your statement that the HVCC requires the use of AMCs is wrong. There is no such requirement. It was and continues to be just a solution that many lenders and banks used, especially the ones that own their own AMCs. There are alternatives – lenders may start their own panels or they may use “panel management” resources such as Mercury Network or Platinum Data. The only stipulation that was in the HVCC or the AIR is that the entity that orders and manages the appraisal process must be isolated from the lending branch, even if it is within the same company.

  21. Mike Branson says:


    Technically, you are absolutely correct. However, practically, if the lenders have decided that this is the only way that they can meet the HUD requirements and protect themselves, then the alternatives really aren’t available. At the time of that writing, there were no reverse mortgage lenders who had any panels of their own and Met Life was only just beginning to implement this when they closed in April of this year. For a strictly retail operation, a panel management solution such as Mercury Network you suggest (which is in itself a technology provider) would require an additional staff on the part of the lenders to still have separate staff apart from the production unit ordering the appraisals, Otherwise, panel management solutions are meant to augment AMC’s, not replace them as they do not order appraisals. This would be a very expensive and potentially lengthy process for lenders offering wholesale or broker business as well.

    Getting back to HUD’s Requirements and role, HUD always sets the minimum guidelines for every program and procedure then lenders are charged with the method by which they will implement. Lenders are also encouraged to utilize “prudent lending” and go above and beyond HUD requirements in many instances. The lenders most often do not receive a set of “instructions” from HUD as to how each guideline must be achieved and so they implement the procedures with which they are confident will result in an insurable loan, every time. They alone take the risk that they may or may not have loans that are deemed uninsurable by HUD later on. Any reverse mortgage loans that the lender cannot get insured, do not contain the government protections afforded to borrowers under the program potentially making lenders liable to borrowers as well as the lender having loans that cannot be sold. There are no “scratch and dent” options available for non-insured HECM reverse mortgages.

    Therefore, if this is the only practical option available to lenders to meet HUD requirements on the reverse mortgage product, it’s really a moot point if the Appraiser Independence Rules for HUD spell this particular procedure out or not. If the lenders feel this is the only way they can protect themselves as well as the borrowers while still meeting the Appraiser Independence Rules, whether it is the letter of the law or the practical implication or “solution” as you termed it, it is still the effect of the lenders making sure they implement a required HUD procedure. I do apologize if I over-simplified the explanation in an effort to explain that originators and borrowers can no longer choose their appraiser, and what the unintended consequence of the use of Appraisal Management Companies (AMC) has been to some borrowers, but those consequences have been very real nonetheless.

  22. Glenn H. Litscher says:

    On May 17th I recieved a letter from Wells Fargo Bank,N.A. notifying me that they had recieved the necessary funds, $8,2339.29 to pay off my Reverse Mortgage 1597335 FHA Case Number 0233571303. They claimed that were processing the documents required to allow the lien to be removed from record. Since thenI have made at least three attempts to get this lien removed. I have been stonewalled by Wells Fargo and HUD. One blames the other. I don’t know why HUD should be involved. They did not get the $8,2339.29. This RM was originated in the Wells Fargo Bank by thier Agent. The agent really did a sales presentation which I think was fraudulent. Anyway this RM was a very costly mistake on my part and still has not come to a conclusion. It will get more costly for me because I am about to retain an attorney. I have been banking with Wells Fargo for 27 years.

  23. doug says:

    I have clients that got a reverse mortgage with wells. They told me they have an available limit of approx. 47,000. I suggested they consider taking the money and investing it. When approached wells the “financial” person said “they don’t do that. They said the money can only be used for purchases, home improvements, medical issues,.travel, etc. Can wells really limit what clients do with their available limit?

  24. LISA says:

    My mother had a reverse mortgage she passed on 12/01/2010 and Wells fargo stated the eviction process with no notification to heirs of property which wanted to buy it back. Fannie Mae took the property over

  25. Renee says:

    My mom has a Wells Fargo Reverse Mortgage, biggest mistake ever! Off the top from her money, she had to have repairs done, shrinking her credit line. Now I am terrified that they will all of a sudden decide the note is due (she is still alive and living in the home) and evict her. I don’t trust them! I have read and reread the contract and it condradicts itself all over the place! If she uses all of her credit will they request the note due? I have no idea anymore! Can this be reversed to another company that may be more trustworthy? I live next door to my mother and my boyfriend and I would rather start paying BACK what was borrowed, of course we can’t do that either! If we send payments and they accept them isn’t that considered an agreement of sorts? Help please?

  26. Mike Branson says:

    Hi Renee,

    You can make any payments at any time on a reverse mortgage without penalty. If you want to begin paying it off, you may do so at any time. Unless your mother received the Wells Fargo proprietary product, then she still has the HUD insured loan and so she does have the protections of the HUD program. HUD has very explicit guidelines for a refinance of a reverse mortgage which includes a “5 times benefit rule”. In other words, your mother would have to get at least 5 times the benefit from the new loan in new proceeds as the cost of doing the loan. You can contact any reverse mortgage lender and with a copy of her most recent statement, they can tell you if she would qualify under the benefit rule.

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