Consumer 10.0: Phila. homeowner wins judgment against Wells Fargo over mortgage fees

Patrick Rodgers at his Wynnefield Heights home with the "sheriff sale" declaration against the mortgage company. At least for now, the contents of Wells Fargo Home Mortgage, 1341 N. Delaware Ave., are set for sheriff's sale to pay a judgment he won.
Patrick Rodgers at his Wynnefield Heights home with the "sheriff sale" declaration against the mortgage company. At least for now, the contents of Wells Fargo Home Mortgage, 1341 N. Delaware Ave., are set for sheriff's sale to pay a judgment he won.
Posted: February 15, 2011

It's not clear how this story will turn out, but right now Patrick Rodgers is living a pay-back fantasy probably shared by millions of struggling U.S. homeowners.

Frustrated by a dispute with Wells Fargo Home Mortgage and by his inability to get answers to questions, the West Philadelphia homeowner took the mortgage company to court last fall.

When Wells Fargo still didn't respond, Rodgers got a $1,000 default judgment against it for failing to answer his formal questions, as required by a federal law called the Real Estate Settlement Procedures Act.

And when the mortgage company didn't pay - does something sound familiar? - Rodgers turned to Philadelphia's sheriff.

The result: At least for the moment, the contents of Wells Fargo Home Mortgage, 1341 N. Delaware Ave., are scheduled for sheriff's sale on March 4 to satisfy the judgment and pay about $200 for court and sheriff's costs.

Rodgers has even written his own headline: "Philadelphia homeowner 'forecloses' on Wells Fargo."

Has he really? Not quite. But Rodgers, who lives in the city's Wynnefield Heights section, won at least a momentary upper hand in a fight with Wells Fargo that began nearly two years ago.

Before you leap to conclusions, let's get a few things straight.

Rodgers isn't unemployed, or a deadbeat. He's a music promoter who owns Dancing Ferret Concerts - if industrial, electronic, or goth is your sound, maybe you've been to one of his gigs. He says he's paid all he owes under the terms of his seven-year-old mortgage.

And there's no reason to think that Rodgers' house is "underwater" - worth less than he owes, in banker jargon that has sadly entered Americans' everyday lexicon.

Actually, it was the value of Rodgers' home that apparently sparked the dispute - not what he paid, or what it would fetch if he wanted to move, but what it would cost to fully restore the house if, say, it was struck by a meteorite and burned to the ground.

Rodgers owns a three-story, six-bedroom Tudor on a beautiful street not far from City Avenue. He paid about $180,000 for it in 2002, and for years handled his mortgage without dispute.

But in mid-2009, his insurer delivered troubling news: His homeowners premium would more than double, because Wells Fargo was insisting that he insure the home's full replacement value - about $1 million worth of coverage, the insurer told him.

Rodgers loves his home, neighborhood, and adopted city - he moved here about 17 years ago, after growing up as a child of American parents in the Bahamas.

But he knew that he paid a fraction of what his home would command elsewhere, such as across City Avenue in Bala Cynwyd. That's one advantage of living, as he says, "a short clip away from the wrong side of the tracks."

In such situations, most lenders require a homeowner to insure for a total approximating a home's market value - a good thing for large swaths of Philadelphia, where a home's market value may have little relation to what it would cost to rebuild stone by stone or feature by feature.

Wells Fargo takes a different tack.

"Generally, we require hazard insurance that is equal to full replacement value of the property and structure," Wells Fargo spokesman Jason Menke told me.

Menke insists that the requirement "is primarily there to provide benefit to the customer." Without full-replacement coverage, he says, a total loss "would have a significant impact on a homeowner's ability to rebuild or replace the property."

Some consumer advocates beg to differ, noting that a homeowner might be willing to move elsewhere rather than to reconstruct a home to century-old standards.

"It's a completely unreasonable demand," says Irv Ackelsberg, a mortgage expert at the Philadelphia law firm Langer, Grogan & Diver. "Their interest is in protecting their mortgage, not ensuring that the house is rebuilt."

Rodgers' next step put him at some risk, he concedes now. He refused to renew the higher-cost policy. Instead, 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.

But he fought back with his suit under the Real Estate Settlement Procedures Act (RESPA). Last month, Wells Fargo sent him more than $1,000, and Menke says it intended to fully satisfy the judgment. "We had considered this matter closed," he says.

What about Rodgers' four-page letter demanding answers about how much Wells is trying to charge him - charges that have added $500 a month to his statement?

Menke says Wells Fargo sent a written response "within the last month." As of Monday, Rodgers hadn't seen it.

But he did have his sheriff's levy. Even if it's just a trophy, it may be enough to make him a national hero.


Contact columnist Jeff Gelles at 215-854-2776 or jgelles@phillynews.com.

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