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Wells Fargo Home Rebate Card – Good Deal for Paying Your Mortgage?

The idea to earn rewards that could pay off your mortgage is fascinating. Wells Fargo has it covered for you if you are determined to pay your mortgage sooner than required. It offers interesting benefits for home mortgage owners to consider getting one. The card is aimed only at Wells Fargo home mortgage customers, and requires a fair (660+) credit score rating to qualify. Issued by the Wells Fargo Bank, the card type is Visa. Wells Fargo claims that since its launch in 2007, it has helped home owners reduce $50 million in mortgage principal. Let’s have a look at what the Wells Fargo home rebate card has to offer:

Wells Fargo Home Rebate Card Features

Some features that the card boasts are really simple and of value to the cardholders.

There is no annual fee with the Wells Fargo Home Rebate Card. There is no APR on purchases and balance for the first year from sign up. After that a 12.15%-25.99% variable APR is applicable on both.

The APR applicable on cash advances and overdraft protection advances is 23.99% to 25.99% which depends on your creditworthiness. The due date to pay entire balance and avoid paying any interest on purchases is 25 days after close of the billing period. If interest is charged it will not be less than $1.

You earn 1 point for $1 spent purchasing anything. There is no cost to add other cardholders and customer service is available 24/7.

Every purchase that you make using this Wells Fargo Home Rebate Card will earn you a 1% rebate. The rebate is automatically applied to the principal outstanding of your mortgage in $25 increments. The only concern here is that it applies only to Wells Fargo mortgages, not any other.

You can protect your Wells Fargo Home Rebate Card with a unique password for online shopping.

The Wells Fargo home rebate card does not work for the following mortgages:

CNVN insured and uninsured second mortgages

Commercial first mortgages

FHA second mortgages

HUD second mortgages

Not yet fully funded or in process loans

piggy back mortgages

VA second mortgages

For balance transfers, $5 or 3% of amount of balance transfer is applicable; whichever is greater for up to 12 months. After that, 5% for each transfer with minimum of $5 applies.

For cash advances, $10 or 5% of each cash advance, whichever is greater will be applicable.

For overdraft protection services, $12.5 for $50 or less overdraft protection advance in a day. If the overdraft protection advance in a day is greater than $50, $20 is applicable.

For foreign currency conversion, a fee of 3% of each transaction is applicable which is converted to US dollars.

A late payment penalty fee of up to $35 is applicable. The same fee applies to returned checks or returned payments.

Wells Fargo Home Rebate Card Additional Advantages

You get automatic protection from liability for unauthorized transaction if you report them promptly

To avoid overdrafts you can link your credit card to your checking account

Visa customers get text and email alerts of spending or purchases which may reflect irregular or suspicious activity

Visa payWAve lets you make payments faster than ever by simply holding it in front of the reader at checkout.

Rebates can be received as check or statement credit and can also be redeemed against travel, gift cards or branded merchandise.

Visa provides automatic rental car insurance, emergency card replacement, travel accident insurance and travel and emergency assistance services

What to Consider When Choosing To Buy Wells Fargo Rebate Card

You should carefully consider all options if you are considering applying for a Wells Fargo home rebate card which helps pay down mortgage through rebates. The first and foremost noteworthy point is that the card only benefits Well Fargo mortgage owners. Secondly, if Wells Fargo sells your mortgage, which is something beyond your control, you will lose the entire rebate you have earned. This is kind of a risk that you stand to take when you apply for the card.

You get to calculate your payment easily using the calculator on the Wells Fargo home page. It gives you a clear estimate and helps in evaluating whether the Wells Fargo Home Rebate Card will actually benefit you, by comparing your monthly card expense to the savings it will provide you in your loan payments.

Rebates are automatically transferred to your mortgage principal when you earn reach $2500 in purchases using your card. This is automated and you do not have to worry about transfers or late payments.

It reduces your amortization period and loan term. For example, you repayment period can shorten by more than a year if you spent $1500 a month using the card; considering you had a $150,000, 30-year mortgage at 4 percent interest rate.

Gas grocery and drugstore purchases get 3% cash back in the first six months of your card holding. All other purchases will earn you 1% cash back.

The Wells Fargo Home Rebate Card offers a good deal with a neat concept to link your purchases in paying your mortgage. It automatically gets the job done every time you earn $25 in rebates. You get other benefits too, suppose you don’t have a mortgage to pay, you can redeem the rebates in other perks like travel or gift cards. You can learn more about rewards and get additional information at the Wells Fargo website.

The only drawback to the Wells Fargo Home Rebate Card is that it is specific to paying home mortgage loans which are from Wells Fargo. More importantly, if Wells Fargo sells your mortgage, which can happen and which is out of your control, you will lose the entire rebate that you have earned. This is one significant drawback and risk that the card poses. Other than that, it seems like a good deal for those who cannot stay away from purchases and also have a home mortgage to pay.

Wells Fargo Is Accused of Making Improper Changes to Mortgages

Even as Wells Fargo was reeling from a major scandal in its consumer bank last year, officials in the company’s mortgage business were putting through unauthorized changes to home loans held by customers in bankruptcy, a new class action and other lawsuits contend.

The changes, which surprised the customers, typically lowered their monthly loan payments, which would seem to benefit borrowers, particularly those in bankruptcy. But deep in the details was this fact: Wells Fargo’s changes would extend the terms of borrowers’ loans by decades, meaning they would have monthly payments for far longer and would ultimately owe the bank much more.

Any change to a payment plan for a person in bankruptcy is subject to approval by the court and the other parties involved. But Wells Fargo put through big changes to the home loans without such approval, according to the lawsuits.

The changes are part of a trial loan modification process from Wells Fargo. But they put borrowers in bankruptcy at risk of defaulting on the commitments they have made to the courts, and could make them vulnerable to foreclosure in the future.

A spokesman for Wells Fargo, Tom Goyda, said the bank strongly denied the claims made in the lawsuits and particularly disputed how the complaints characterized the bank’s actions. Wells Fargo contends that the borrowers and the bankruptcy courts were notified.

“Modifications help customers stay in their homes when they encounter financial challenges,” Mr. Goyda said, “and we have used them to help more than one million families since the beginning of 2009.”

According to court documents, Wells Fargo has been putting through unrequested changes to borrowers’ loans since 2015. During this period, the bank was under attack for its practice of opening unwanted bank and credit card accounts for customers to meet sales quotas.

Outrage over that activity — which the bank admitted in September 2016, when it was fined $185 million — cost John G. Stumpf, its former chief executive, his job and damaged the bank’s reputation.

It is unclear how many unsolicited loan changes Wells Fargo has put through nationwide, but seven cases describing the conduct have recently arisen in Louisiana, New Jersey, North Carolina, Pennsylvania and Texas. In the North Carolina court, Wells Fargo produced records showing it had submitted changes on at least 25 borrowers’ loans since 2015.

Bankruptcy judges in North Carolina and Pennsylvania have admonished the bank over the practice, according to the class-action lawsuit filed last week. One judge called the practice “beyond the pale of due process.”

The lawsuits contend that Wells Fargo puts through changes on borrowers’ loans using a routine form that typically records new real estate taxes or homeowners’ insurance costs that are folded into monthly mortgage payments. Upon receiving these forms, bankruptcy court workers usually put the changes into effect without questioning them.

It is unclear why the bank would put through such changes. On one hand, Wells Fargo stood to profit from the new loan terms it set forth, and, under programs designed to encourage loan modifications for troubled borrowers, the bank receives as much as $1,600 from government programs for every such loan it adjusts, the class-action lawsuit said. But submitting the changes without approval violates bankruptcy rules and puts the bank at risk of court sanctions and federal scrutiny. When a lawyer for a borrower has questioned the changes, Wells Fargo has reversed them.

Abelardo Limon Jr., a lawyer in Brownsville, Tex., who represents some of the plaintiffs, said he first thought Wells Fargo had made a clerical error. Then he saw another case.

“When I realized it was a pattern of filing false documents with the federal court, that was appalling to me,” Mr. Limon said in an interview. The unauthorized loan modifications “really cause havoc to a debtor’s reorganization,” he said.

This is not the first time Wells Fargo has been accused of wrongdoing related to payment change notices on mortgages it filed with the bankruptcy courts. Under a settlement with the Justice Department in November 2015, the bank agreed to pay $81.6 million to borrowers in bankruptcy whom it had failed to notify on time when their monthly payments shifted to reflect different real estate taxes or insurance costs.

That settlement — in which the bank also agreed to change its internal procedures to prevent future violations — affected 68,000 homeowners.

Borrowers having financial difficulties often file for personal bankruptcy to save their homes, working out payment plans with creditors and the courts to bring their loans current in a set period. If the borrowers meet their obligations over that time, they emerge from bankruptcy with clean slates and their homes intact.

Changing these payment plans without the approval of the judge and other parties can imperil borrowers’ standing with the bankruptcy courts.

In the class-action lawsuit filed last week, the lead plaintiffs are a couple in North Carolina who say that Wells Fargo submitted three changes to their payment plan in 2016 without approval. The first time, Wells Fargo put through the changes without alerting them, according to the couple, Christopher Dee Cotton and Allison Hedrick Cotton.

The Cottons’ monthly payments declined with every change, dropping to $1,251 from $1,404.

Buried deep in the documents Wells Fargo filed — but did not get approved by the borrowers, their lawyers or the court — was the news that the bank would extend the Cottons’ loan to 40 years, increasing the amount of interest they would have to pay. Before the changes, the Cottons owed roughly $145,000 on their mortgage and were on schedule to pay off the loan in 14 years. Over that period, their interest would total $55,593.

Under the new loan terms, the Cottons would have incurred $85,000 in interest costs over the additional 26 years, on top of the $55,593 they would have paid under the existing loan, their court filing shows.

Theodore O. Bartholow III, a lawyer for the Cottons, said Wells Fargo’s actions contravened the intent of the bankruptcy system. “When it goes the right way, the debtor and mortgage company agree to do a modification, go to court and say, ‘Hey judge, modify or change the disbursement on my mortgage.’”

Instead, Wells Fargo did “a total end run” around the process, said Mr. Bartholow, of Kellett & Bartholow in Dallas. The Cottons declined to comment.

Mr. Goyda, the Wells Fargo spokesman, denied that the bank had not notified borrowers. “The terms of these modification offers were clearly outlined in letters sent to the customers and/or to their attorneys, and as part of the Payment Change Notices sent to the bankruptcy courts,” he wrote by email.

Mr. Goyda said that “such notices are not part of the loan modification package, or part of the documentation required for the customer to accept or decline modification offers.” He added, “We do not finalize a modification without receiving signed documents from the customer and, where required, approval from the bankruptcy court.”

Mr. Limon and other lawyers say that while the bank may wait for approval to complete a modification, it has nevertheless put through unapproved changes to borrowers’ payment plans. According to a complaint he filed on behalf of clients in Texas, instead of going through the proper channels to try to modify a loan, Wells Fargo filed the routine payment change notification.

The clients also accuse the bank of making false claims by contending that the borrowers had requested or approved the loan modifications. In many cases, the trustees who handle payments on behalf of consumers in bankruptcy would accept the changes Wells Fargo had submitted on the assumption they had been properly approved.

Mr. Limon represents Ignacio and Gabriela Perez of Brownsville, who say Wells Fargo put through an improper change to their payment plan last year.

After experiencing financial difficulties, Mr. and Mrs. Perez filed for Chapter 13 bankruptcy protection in August 2016. They owed about $54,000 on their home at the time, and had fallen behind on the mortgage by $2,177. The value of their home was $95,317, records show, so they had substantial equity.

In September, the Perezes filed a payment plan with the bankruptcy court in Brownsville; the trustee overseeing the process ordered a confirmation hearing on the plan for early November.

But in a letter to the Perezes dated Oct. 10, Wells Fargo said their loan was “seriously delinquent” and offered them a trial loan modification. “Time is of the essence,” the letter stated. “Act now to avoid foreclosure.”

Because they were going through bankruptcy, the Perezes were not under any threat of foreclosure. Mr. Perez said in an interview that the letter worried him, so he asked his lawyer to investigate.

Then, on Oct. 28, 2016, DeMarcus Jones, identified in court papers as “VP Loan Documentation” at Wells Fargo, filed a notice of mortgage payment change with the bankruptcy court. It said the Perezes’ new monthly payment would be $663.15, down from $1,019.03. In the notice, the bank explained that the reduction was a “Payment change resulting from an approved trial modification agreement.”

The changes had not been approved by the Perezes, their lawyer or the bankruptcy court, their complaint said.

Although the monthly payment Wells Fargo had listed for the Perezes was lower, there was a catch — the same one that showed up in the Cottons’ loan. The Perezes had been scheduled to pay off their mortgage in nine years, but the loan terms from Wells Fargo extended it to 40 years. The Perezes would owe the bank an extra $40,000 in interest, the legal filing said.

“I thought that I was totally crazy, or they were totally crazy,” Mr. Perez said. “I am 58, in what mind could they think I would agree to extend my mortgage 40 years more? I don’t understand much maybe, but it doesn’t sound legal to me.”

Mr. Limon quickly fought the changes.

If he had not, Mr. and Mrs. Perez could have faced further complications. The new Wells Fargo payments were so much less than the payments the Perezes had submitted to the bankruptcy court that if the trustee had started making the new payments with no court approval, the Perezes would have emerged at the end of their bankruptcy plan owing the difference between the amounts. The Perezes would be unwittingly in arrears, and the bank could begin foreclosure proceedings if they were unable to make up the difference.

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