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Philly man 'forecloses' on Wells Fargo

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 Feb 18, 2011 12:31PM

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. Post continues after video.

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.

More from MSN Money:

Feb 18, 2011 3:54PM
Good for Mr. Rodgers. These banks continue to victimize people who cannot afford attorneys to defend their interests. Now if Mr. Rodgers could draw a multi-million dollar bonus for his efforts, true justice would be served.
I find it interesting Wells Fargo sent him the funds and considered the case resolved. Anyone try to send funds to Wells Fargo for their home in foreclosure and consider the case resolved? I don't believe Wells Fargo would and Mr. Rodgers shouldn't either.
Feb 18, 2011 3:58PM
Take a picture.  Finally somebody is sticking it to a bank instead of vice-versa.
Feb 18, 2011 4:24PM
Bravo but I would be contacting a lawyer   and  looking in to  Whether Wells Fargo is breaking the Law by forcing him to insure a 180,000 mortgage   for 1 million.  As far as I can find  out on my own legally they Can not do that everything I am  finding  points to  the fact that as long as the insurance  covers  the  amount  owed  that's all they can legally force him to  carry.  If Thats truly the case I would file charges  with the State
it does not get any better than that the little guy wins one
Feb 18, 2011 4:02PM
They are the mafia... and its legal!! I quit banks 5 years ago and have never looked back.. there isnt anything a $3.00 pre-paid debit card cant do that a bank can and if you are borrowing from them.. just shop for loan shark with the best rate and read your contracts...
Feb 18, 2011 5:50PM

That is awesome. I hope he ends up owning this bank!

Feb 18, 2011 6:05PM
Just as unsavory as when management of a corporation uses funds of the company to insure the lives of employees without the employees knowing it. Employee dies, company makes millions. In this case, the mortgagee pays for the excess insurance and the mortgagor gets 5 times the value of the principal due them, without spending a nickle.
Feb 18, 2011 5:58PM
Yahoo!!!!!!!. It is now 1 for us and 1 million for the banks. I am a conservative and I bank with Wells Fargo- at least until I can move my accounts. It is great that one consumer has won a judgment against this non-caring over profiting bank.  After we figure out how to balance Washington's books, Congress has to take up legislation to control the profit taking of big banks. Even possibly look at ways to break them up into regional stand alones. I am all about competition- so lets drive that with smaller friendlier banks that want us as business partners and not money slaves.
Feb 18, 2011 9:06PM
Very interesting!  CitiMortgage  escrowed our homeowners insurance with out our permission.  We had been paying our homeowners insurance premiums directly to Mercury.  CitiMortgage sent Us a "statement of account" which showed a $130 increase per month.  We were given the runaround until i brought this to the attention of my branch manager.  First we were told we could not change our escrow account.  Then we were told we had to sign a form in order to do so.  That was 8 days ago.  They said they mailed the form.  No form yet.  We applied for the mortgage modification plan last April.  CitiMortgage strung Us along until August of 2010 at which time we were forced to borrow money form our inlaws to bring the mortgage current or they were going to auction off our home of 26 years.  CitiMortgage told Us they had lost our paperwork for the modification of which we resubmitted but they did nothing and called to tell Us we were declined.  This was the most fraudulent B.S. we have ever been thru.  CitiMortgage is awful!  If we could we would leave CitiMortgage immediately but we only owe 80,000 on our home now and are keeping up the payments even though it has been very difficult.
Feb 18, 2011 8:34PM
The bank has the right to demand insurance at the "replacement value" of the home regardless of the amount owed.  If you have a fire and it turns out you are under-insured the insurace company can refuse to pay anything!!!! They don't even have to pay the amount you are insured if it's less than replacement cost. THAT IS A F&*^%$#CKED UP LAW that many people don't know about.  Wells Fargo was in the wrong for ignoring hiis letters but they were within their rights to place the insurance when the homeowner let his policy lapse.  Sad, but the's in there.
Jul 15, 2011 3:14PM
It depends on the terms of the loan on how much he needs to insure it for.  If the terms say that he needs to insure the replacement cost, then he would have to insure if for such.  Most likely it does because otherwise if someone sold a home for real cheap, they wouldn't need much insurance.  This is a problem that I ran into recently with my RD loan.  They only allow your payment to be a certain amount of your income (which is good) so we were approved for a certain amount.  We put in an offer for $10,000 less than what we were approved for thinking it is never smart to borrow your max but the house is valued at 3 times what our offer was.  This made the estimated insurance go way up and made it so we almost couldn't get the loan.  We had to prove our creditworthiness to the RD department for a small allowance over the threshold.
Feb 19, 2011 4:07AM

I've dealt with 123 mortgage refi on two refis now, and in each case it was about as painless as anything that involves paperwork by the acre can possibly be. I would heartily recommend his services without reservation for those thinking of refi.

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