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I noticed that someone posted something about Wells Fargo and Alphonso Gill a few weeks ago. With the hope that other people can learn from our mistakes, please read about the horrible experience we have had over the past 2 years with a Wells Fargo renovation loan.

I only hope that some other people on this forum can learn from our mistakes and naivete.

When I first met with Alphonso Gill in June of 2005 and told him about the mixed-use property that we were trying to close on he had exactly the kind of “can do” confidence that I was hoping for. I explained to him that we were planning on converting the property to a 3 family and that we did not have the 30% down payment that some banks seemed to require for mixed use properties because we needed part of our savings to convert the ground floor into a residential space where we would live. I explained to Mr. Gill that this would be our home for a long time and that we were looking for a residential loan and could accept nothing less than the security of a 30 year fixed loan. This was what we could afford—both my wife and I have devoted our lives working for non-profit organizations–and it only made sense to us to get a 30 year fixed loan in the climate of “record low” interest rates of 2005. Mr. Gill told me that it was not a problem, and explained that if we put 20% down that the bank would finance part of our loan as a 30-year fixed and the other part would be a home equity loan with a variable rate that we could refinance when we were done with the renovation. He assured me that everything would be okay and that we would have no problem refinancing the home equity portion of the loan once the renovations were over.

A year later when we were done with our renovation and began the process of refinancing the home equity portion of our loan things became equally frustrating with Wells Fargo and Mr. Gill. He almost never returned our phone calls and emails. When he finally got around to having a post renovation appraisal done the value came in at $600,000 less than the original appraisal he had done over a year earlier, in July 2005, when we bought the building. I was shocked that anybody could even take such an appraisal seriously, however it proved to be an obstacle in refinancing our home equity line of credit. We were particularly distraught to learn about this appraisal since we had just devoted a year or our lives and well over $100,000 toward renovating our building. We protested that the appraiser must have made a mistake, but apparently even after taking into account “new information provided by the owners and real estate professionals,” the amended appraisal still came in $500,000 short of the $1,400,000 appraisal that Wells Fargo used when we bought the building.

So, Wells Fargo ordered another appraisal, which came in at 1.4 million, (still short of the $1,500,000 we would have expected with the additional value of the renovation we had completed.) However, this appraisal was still not good enough to refinance our loan since it is apparently the practice of Wells Fargo to take the average of two appraisals, which left us with an appraised value of $1,150,000, and an LTV that was still not high enough to refinance.

At this point, July 5th, 2006, Mr. Gill told us that he could no longer refinance our home equity line of credit with Wells Fargo Home Equity and the alternative would be to refinance our entire loan with Wells Fargo Home Mortgage. However, this would require paying $50,000 worth of closing costs, which we had already paid less than a year ago, including almost $20,000 in discount and origination fees.

It has now been over a year since we began the process of refinancing our loan and we are still sitting with a huge variable rate home equity loan. I cannot emphasize enough our deep disappointment with Wells Fargo and the way they handled our entire loan. We chose Wells Fargo to finance our home because we wanted the security of dealing with a well-established firm, with professional, trained agents who we could trust and upon whose advice we could rely. We did not want to have to face bait and switch tactics or other unsavory methods from the institution to which we were about to entrust our entire life savings of over $300,000. But that is exactly what we have suffered. Our experience with Wells Fargo has been a nightmare riddled with false promises, poor communication and shocking disavowals of responsibility.

I only hope that some other people on this forum can learn from our mistakes and naivete