If you’re customer of Wells Fargo and you own a home, odds are, you’re familiar with its rewards program for its mortgage customers. This week, it announced $50 million in mortgage principal has been paid by homeowners using their Wells Fargo Home Rebate Card. That’s an impressive number, no doubt. The credit card itself is quite impressive as well.
That $50 million paid towards principal is just since the program was unveiled in 2007, too.
Wells Fargo Rebate Program
Every single purchase a Wells Fargo customer makes with his rewards card is counted towards rebates credited to the principal on their Wells Fargo Home Mortgage loan. Using $25 increments, the rebates are applied automatically for the life of the mortgage. According to its presser, the rebate can help customers potentially save thousands of dollars in interest while also knocking time off of their fixed rate mortgages. It uses this example,
A cardholder with a $150,000 mortgage who spends $1,500 a month on the Home Rebate Card could shorten their payment schedule by more than one year.
Beverly Anderson, who oversees the Wells Fargo Consumer Financial Services group, said,
The card is just one example of how we help customers make smart use of their money and achieve their financial goals. The Home Rebate Card provides a way for customers to manage day-to-day spending while automatically paying down what is likely their largest debt – their mortgage.
Users have other rewards if they choose. Those might include travel rewards, electronics, charities, cash and discounts when they shop at their favorite store through the Wells Fargo site. The card itself offers the same zero fraud liability that most other credit cards offer. Further, users can take advantage of the free credit management tools offered by the bank. The Smarter Credit Center is a free website that provides articles, videos and other information designed to help consumers build, rebuild or maintain their credit.
The real question is why is Wells Fargo announcing this and why is it limiting it to just its mortgages? Some say it’s little more than efforts of neutralizing much of the bad news out of the Wells Fargo camp these days. In fact, news broke hours before this presser was released that the New York attorney general had laid out a growing number of complaints against both Wells Fargo and Bank of America.
New York Attorney General Eric Schneiderman has accused the banks of “dragging their feet” when it comes to processing requests from homeowners for lowered monthly payments. Remember, they were ordered to work with consumers as part of the $25 billion national mortgage statement. Apparently, Wells Fargo isn’t cooperating, even as Schneiderman threatened to sue earlier this year.
And really – has it not occurred to these massive banks that cooperating and working with their customers could benefit them on every level in both the short term and long term? Imagine how much better the bank and its customers would be had there been a sincere effort of finding solutions instead of further weighing these struggling customers down?
Instead, Schneiderman threatened to sue Wells Fargo for violating the terms of the agreement. It involved 49 state attorneys general and the nation’s “big five” banks, including Wells Fargo. They were found to be engaging in foreclosure abuses. Schneiderman says his office received 339 complaints between customers for Wells and Bank of America and each included complaints that they were not in compliance with the timeline of the agreement. Many homeowners say the banks are taking far longer than the allotted thirty days to respond to their requests for interest or principle reductions.
During the height of the scandal, just as the lawsuits were being filed, an investigation uncovered startling accusations from some families. Many found themselves being denied for loan modifications after quick “less than two minute” interviews. Others who applied say they followed all of the requirements, including sending sensitive financial and identification documentation to a fax machine that hadn’t been manned for months. Others found themselves being foreclosed on because of an interest payment of just $1.18 – and yes, that’s one dollar and eighteen cents.
There was one file where they weren’t even past due and they were in foreclosure status,
the loan processor who was interviewed at the time said.
They’re pushing these files and pushing these files.
Then, several months ago, yet another scandal with Wells Fargo broke. A lawsuit was filed that claimed Wells had discriminated against thousands of Latinos, blacks and other minorities. It was ordered to pay $175 million in damages, according to Thomas Perez, the assistant attorney general who handled the case. He called it a “racial surtax”. The Justice Department’s own investigation found a whopping 30,000 minority borrowers across 36 states who were being charged excessively higher interest rates and fees for their mortgages.
In many instances, borrowers were charged up to $3000 in mortgage closing fees that their white counterparts were not hit with. The credit histories were very similar, their job histories, bank balances and credit scores all were very similar. A Latino with those same similarities paid more than $2,000 more than the white family. Worse, 4,000 minority borrowers with really strong credit were steered into subprime loans, which increased their interest and payments.
We wonder if the Wells Fargo Home Rebate Card Rewards Program was offered to those customers. So is this press release Wells Fargo’s way of balancing the news that defines its image? It’s possible. Until this and the other banks change the way their customers view them, they’re always going to be little more than a necessary evil. What kind of company – financial or otherwise – would want to be viewed that way? It’s clear it matters, otherwise, Wells wouldn’t have released the press release.
What are your thoughts on this and other banking scandals? Are the efforts being made enough? Also, if you’re a Wells Fargo mortgage customer, have you enrolled in its rewards program? If so, share your story with us. We’d like to hear from you.
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Wells fargo just sent out paperwork about the “new rebate” program and in the fine print it said that everything was now considered a “cash reward” and would be reported to federal and state as taxable income How can they do that?
Comment by dee — August 31, 2013