wells fargo December 20, 2010 Jennifer J. Johnson, Secretary

wells fargo

MAC

4 0 1-0 6 4

one home campus

Des

Moines, I

5 0 3

8-0 0 0 1

December 20, 2010

Jennifer J.

Johnson,

Secretary

Board of Governors of the Federal Reserve System

20th

Street and Constitution Avenue,

North

west

Washington, DC

0 5 5 1

[email protected]

Re:

12 CFR

Part

226: Truth-in-Lending; Proposed Rule amending Regulation Z

Federal Reserve System Docket No. R-1390: September 24, 2010

Dear Ms.

Johnson:

This letter is submitted on behalf of

Wells

Fargo & Company and its affiliates (Wells Fargo) in response to

the Federal Reserve's proposed amendments to Regulation Z published in the Federal Register on

September 24, 2010 at page 58539 (the Proposed Rule or the Rule). We support the efforts of the Federal

Reserve Board of Governors (the Board) to produce disclosures consumers

will

understand,

while

preserving broad access to credit. Wells Fargo appreciates the opportunity to comment and respectfully

requests

that

the Board consider adopting the suggestions set forth in this letter.

Wells

Fargo's comments are summarized in the following categories. A detailed discussion of material

topics in each category can be found in the Appendix portion of this letter.

Implementation and Rule Making Considerations

Right to a Refund of Fees

Higher-Priced Mortgage Loans

Interest

as a Prepayment Penalty

Loan Modifications

HELOC

Requirements

Reverse Mortgage Loans

H. Rescission

page

Implementation

and

Rule

Making

Considerations

Coordination with other Regulatory Changes

call

to the Board's attention the critical need to coordinate the final Regulation Z amendments with

the mandate of the Consumer Financial Protection Bureau

(CFPB)

set forth in the Dodd-Frank

Wall

Street Reform and Consumer Protection Act (Dodd-Frank) to issue a new consumer disclosure

that

combines the current TIL and GFE disclosures into one.

Wells

Fargo believes

that

the interests of

consumers are best served if the mortgage lending industry is

given

one coordinated and comprehensive

set of rule changes applicable to these disclosures, which then can be consistently implemented. If

separate regulations impacting the same disclosures are promulgated in a piecemeal fashion, this

will

increase consumer confusion, significantly increase the implementation costs and timeframes, and

ultimately increase the cost of consumer credit.

Timeline

for Mandatory Compliance

Wells

Fargo urges the Board to maximize the time between publication of a final regulation and the

mandatory compliance date. Many of the proposed changes

will

require complex process and technology

changes across multiple origination and servicing systems and lines of business. In addition, a large

number of additional regulatory changes

will

impact the mortgage lending industry over the next 12-24

months. It can be anticipated

that

resources at all mortgage lending institutions

will

be operating at or

beyond

maximum capacity to implement all the required changes.

Right

to a

Refund

Fees

Wells

Fargo does not support requiring a creditor to refund any fees imposed within 3 business days after

receipt of the early disclosures at the request of the consumer. Our concerns involve the inevitable delay

in the processing time of the consumer's transaction, to the potential detriment of the consumer, and the

complexity

to administer such a requirement.

Higher-Priced

Mortgage

Loans

Wells

Fargo supports the creation of a "transaction coverage rate" to determine whether a transaction is a

higher-priced mortgage loan under Regulation Z, and we generally support the Board's effort to exclude

third

party fees and costs from those used to calculate a high-cost loan. However,

Wells

Fargo strongly

urges the Board to mandate the use of the transaction coverage

rate

to ensure consumers receive

consistent

treatment

among all creditors.

Interest

as a

Prepayment

Penalty

Wells

Fargo does not support requiring the assessment of interest for a period after loan

payoff

to be

treated as a prepayment penalty. The Board should work with the Department of Housing and Urban

Development

(HUD) to reconcile this requirement with the current FHA and

GNMA

requirement to

assess and collect such interest on FHA loans, in order to ensure FHA loans remain

widely

available and

affordable to consumers.

page 3.

Loan

Modifications

Wells

Fargo is generally supportive of the Board's proposed clarifications and exceptions relative to the

applicability

of TIL disclosure requirements to loan modification scenarios. However,

Wells

Fargo is

requesting further clarification and specificity for several concepts, including the scope and definition of

"delinquency", "default", "refinancing", "de minimus increase" and "reasonable

fees".

In order to ensure

the final rules do not have the unintended

effect

of discouraging servicers from using all available options

to structure modifications for consumers,

Wells

Fargo urges the Board to

codify

exceptions for several

modifications

scenarios, such as those where only reasonable fees and expenses and

third

party fees are

charged, and those where the payment amount is decreasing, among others.

F. HELOC

Requirements

Wells

Fargo does not support extending the new credit card account prohibition on floor rates to open-

end real estate secured credit

(HELOCs).

feel

HELOCs

closely

align to a closed-end

ARM

loan

than

a non-real estate secured credit card in terms of consumer behavior, risks and transaction

size,

and

similarly

should not carry a restriction against a floor interest rate.

Reverse

Mortgage

Loans

Wells

Fargo applauds the Board's efforts to address very significant issues relating to reverse mortgage

loans in the proposed rule.

Wells

Fargo is highly supportive of the Board's efforts to provide creditors with

disclosures

that

are designed specifically for the unique features of reverse mortgage loans. We also

believe

that

the Board's proposed rules regarding

third

party counseling and advertising offer meaningful

protections for consumers, although

Wells

Fargo recommends

that

the restriction on the imposition of

nonrefundable fees extend for a maximum of one business day.

Wells

Fargo supports further rulemaking

and clarification in the area of offering financial and insurance products with reverse mortgages but also

believes

that

CDs should be added to the products exempt from the anti-tying rule.

Wells

Fargo supports

the Board's determination not to impose a suitability

standard,

focusing instead on provisions to ensure

that

the consumers can be

fully

informed to select the product

that

best suits their needs. We share the

Board's

goal of ensuring

that

reverse mortgage rules and disclosures maximize transparency, consistency

and plain language for the reverse mortgage consumer. It is in

that

context

that

we offer the majority of

our suggestions, corrections and clarifications

that

we urge be incorporated into the final rule.

Rescission

Wells

Fargo generally supports the Board's proposed amendments to the consumer's right to rescind in

certain transactions and circumstances. We have concerns with the timing requirements for the

acknowledgement

the lien holder must provide in cases where the consumer notifies the servicer of their

exercise

of the right to rescind. In addition,

Wells

Fargo feels strongly

that

the final rules should address

the long-standing complexity around the two separate model rescission notices, and take this opportunity

to create one consolidated form, thereby greatly reducing the risk of consumer confusion.

page 4.

Wells

Fargo would also like to draw the Board's

attention

to our comment letter dated December 23, 2010

regarding the proposal to include consumer-selected credit insurance and debt cancellation charges in the

finance charge for closed-end real estate secured loans.

Wells

Fargo does not support this requirement

for

products

that

are optional and voluntarily selected by the consumer. If the proposal to remove the

finance charge exclusions for these products is adopted, we believe it

will

result in many more loans

triggering

high-cost thresholds. Because

Wells

Fargo and nearly all other creditors do not originate high-

cost

loans, consumers would be left with more limited options to purchase this voluntary financial

protection. Refer to

Wells

Fargo's comment letter dated December 23, 2010 for additional discussion of

this topic.

Wells

Fargo strives to provide consumers with

flexible,

wide-ranging and competitive credit products, and

superior service, while

fully

complying with all applicable laws and regulations. We strongly support the

improved disclosures to promote consumer understanding. At the same time, we urge the Board to

consider the significant number of regulatory changes impacting mortgage lenders and consumers within

the next

- 24 month period when establishing mandatory compliance dates for the final rules.

Wells

Fargo appreciates the opportunity to provide comments.

Respectfully,

signed

Cara

K. Heiden

Co-President

Wells

Fargo Home Mortgage

page 5.

Appendix

Section A -

Implementation

and Rule Making Considerations 6

Section B - Right to a Refund of Fees 6

Section C - Higher-Priced Mortgage Loans 6

Section D -

Interest

as a Prepayment Penalty 7

Section E - Loan Modifications 8

Section F - HELOC Requirements 11

Section G - Reverse Mortgage Loans 12

Section H - Rescission 23

page 6.

Section A — Implementation and Rule Making Considerations

This

issue is addressed in Sections B-H.

Section

—

Right

to a

Refund

Fees

Refunding

Fees

collected

within

three

business

days

after

receipt

early

disclosures

The

Board is proposing

that

a creditor be required to refund to the consumer any fees previously imposed

the consumer decides not to proceed with the loan and so requests within

three

business days after

receipt of early disclosures. Wells Fargo does not support this requirement.

RESPA

and

TELA

both now

require

that

a creditor not collect any fee, except for the cost of a credit report, until the consumer has

received

their initial disclosures. Most creditors are reluctant to order appraisals, or incur any other

processing

expense until they have collected the cost from the consumer. Not collecting upfront fees for

an additional

three

business days during the refundability period

will

delay the processing of the

transaction for the consumer in two

ways.

In a purchase money transaction, where the closing date is

chosen by the consumer and seller

rather

than

the creditor, a critical factor in meeting the chosen closing

date is the timely receipt of the appraisal. A delay in ordering the appraisal can in many cases delay the

chosen closing date to the detriment of the consumer and seller. In a refinance transaction, consumers

are very interest

rate

sensitive. Creditors are not willing to lock in interest rates until fees are paid. A

delay

in the ability to collect the

rate

lock fee and lock the interest

rate

could have significant financial

impact to the consumer. In addition, to provide for the refundability, the creditor

will

need to set up a

complex

"trust

account" process to deposit any fees collected early, along with a process to make the

refunds.

The

Board indicates

that

the goal of this proposal is to encourage a consumer to further "shop" for a better

loan package after they have received their disclosures. Our experience and research have shown

that

consumer "shops" prior to applying for a loan and once they have applied for a loan they are committed to

proceeding with the creditor they have chosen. Wells Fargo recommends

that

the Board delay any

proposal such as this until such time as the Consumer Financial Protection Bureau has reviewed the

application process, in conjunction with their mandate to combine the early TIL with the Good Faith

Estimate required by

RESPA,

and determined what disclosures and timing are appropriate in light of

actual consumer behavior.

Section

C -

Higher-Priced

Mortgage

Loans

Transaction

coverage

rate

and

changes

Higher-Priced

and

High-Cost

metrics

The

Board proposes to revise how a creditor determines whether a closed-end loan secured by a

consumer's principal dwelling is a higher-priced mortgage loan. The proposal would replace the Annual

Percentage Rate ("APR") as the metric a creditor compares to the average prime offer

rate

("APOR") to

determine if the transaction is a higher-priced mortgage loan. The new metric would be the "transaction

coverage

rate", which would be calculated in the same manner as the APR except

that

it would be based

on a modified prepaid finance charge

that

would include only finance charges retained by the creditor, its

affiliates,

or a mortgage broker.

page

The transaction coverage

rate

would not reflect other closing costs

that

would

be treated as finance charges for the purposes of calculating the APR. The proposed changes tie

back

to the proposed closed-end

TILA

rules

that

were published in 2009, which would change the APR

calculations to include basically all settlement charges in the APR calculation.

• Wells

Fargo agrees with the creation of the transaction coverage

rate

to be used to test whether a

transaction is a higher-priced mortgage loan. This transaction coverage

rate

closely

aligns

with

the

APOR

and

will

be a more accurate determination of whether a transaction is truly a

higher-priced mortgage loan. If the transaction coverage

rate

is implemented, it should not be

optional. All creditors should use the same

standard

in determining if a transaction is a higher-

priced mortgage loan. An optional metric for determining a higher-priced mortgage loan would

encourage differing

treatment

creditor by creditor, and perhaps transaction by transaction. It

could

also distort reporting of, and lender-to-lender comparisons with respect to higher-priced

mortgage loans; and could cause difficulties in testing compliance with secondary market

restrictions and representations.

•

The Board has reviewed its proposed changes to the APR calculation as they

will

impact the high-

cost

tests. The proposal clarifies

that,

not withstanding their inclusion in the APR, most

third

party fees should not be counted toward the points and fees

that

trigger high-cost mortgage loans.

Wells

Fargo agrees with limiting the fees and costs

that

trigger a high-cost mortgage loans. We

are concerned, however, about the

level

of complexity these proposed regulations would create.

will

now need to track which fees are included for the APR and , which are included for the

high-cost test, then which are covered for

state

specific higher-priced or high-cost tests, which

may or may not align with these proposed regulations. This becomes extremely complex. The risk

non compliance is so great this additional complexity could lead to reduced availability of

credit or an overall increase in the cost of credit for consumers.

•

The Board has asked for comments on the impacts of using the transaction coverage

rate

regarding

state

or local high-cost, and higher-priced statutes or regulations. Many

state

high-cost

laws

have incorporated the current

HOEPA

definitions into their statutes. Much of the language

used in these

state

high-cost

laws,

well

as the citation and cross reference to Regulation Z

provisions

that

are being amended

will

be outdated upon adoption of this Proposal, and

will

require

state

legislative action to realign to the new

APOR

formulas and adoption of the

transaction coverage rate. Realignment may take many years. As a result, the changes to

Regulation Z, and the implementation of the inclusive APR are very complex. Creditors

will

need

to continue to calculate and track APR and high-cost thresholds under the existing calculations

for

various states.

Section

D -

Interest

as a

Prepayment

Penalty

Content

Disclosures/Prepayment

Penalties

Comment

18(k)(

i )- i

The

Board is proposing to amend comment 18(k)( i

1 to clarify

that,

on a closed-end transaction,

assessing interest for a period after the loan balance has been paid in

full

is a prepayment penalty, even if

the charges result from the interest accrual amortization method used on the transaction. Today, if the

loan is a higher-priced mortgage loan, a prepayment penalty may not apply after the second year after

application; Dodd-Frank imposes further limitations. The Board recognizes the impact this has on

Federal Housing Administration (FHA) insured loans, where, under the terms of the FHA note, if a

consumer prepays an FHA loan in

full

in the middle of the month, the consumer must pay interest

through the end of the month in which the prepayment is made.

page 8.

Wells

Fargo is very concerned about the Board's position on this issue, and requests

that

the Board work

with

the FHA and Government National Mortgage Association

(GNMA)

to resolve the dichotomy between

the agencies. Under the current FHA notes and structure of

GNMA

securities the economics of the

transaction are based on this method of calculating interest. Changing this requirement

will

have

negative impacts on the cost and availability of FHA-insured credit.

Wells

Fargo requests

that

if the Board

publishes this commentary as proposed, the Board clearly indicate

that

the interpretation applies only for

applications taken after the publication date and provide for sufficient time to make appropriate changes

before the change is

effective.

Section

E -

Loan

Modifications

•

Modifications

Mortgage

Terms

226.20(a)(

1 )

Wells

Fargo generally supports the exceptions provided by the proposal. However, we request a

clear

definition of "delinquency" and "default". We believe defining these terms to be delinquency

or default according to the terms of the contract

will

encourage

rather

than

discourage creditors

from offering workouts to consumers because

there

will

be a clearer designation of when no new

TIIA

disclosures are required.

For home equity lines of credit

(HELOCs),

Wells

Fargo believes

that

a modification of a

HELOC

to cure or prevent delinquency does not constitute a conversion to closed-end credit and

TILA

disclosures are not required. This

will

further encourage creditors to offer workouts to consumers

in these circumstances.

In addition, although the Board did not specifically request comment,

Wells

Fargo further

requests clarification from the

Official

Staff

Comment to 226.20, which provides as

follows:

Paragraph 20(a)(4).

Workout Agreements. A

workout

agreement is not a refinancing unless the annual

percentage rate is increased or additional credit is advanced beyond

amounts

already

accrued

plus insurance premiums.

Wells

Fargo strongly recommends

that

a workout

that

includes capitalization, but where no

additional credit is extended, should not be considered a refinancing. For example, if the creditor

previously

paid the consumer's real property taxes and added

that

amount to the mortgage

balance as a non-interest-bearing amount secured by the mortgage, but through a modification,

the creditor capitalizes those amounts, such a workout is not a "refinancing"

that

requires new

TIL

disclosures. We encourage the Board to consider providing this further clarification to this

exception.

Finally,

Wells

Fargo strongly urges

that

the Board not expand the number of features

that

would

trigger new disclosures. We believe

that

any effort to expand the number of transactions

will

discourage servicers from offering broad workout arrangements to consumers.

page 9.

• Increase Loan Amount - 226.2o(a)( i )( i )(A)-3

Wells

Fargo

is in

favor of the Board providing

that

a de

minimis

increase

in the

loan amount owed

the

existing legal obligation would

not

trigger

requirement

give

new disclosures. However,

the provision should further exclude from

the

definition those additional debt amounts

creditor

authorized

advance,

pay or

disburse,

protect

its

interest

and

rights under

the

terms

of the

contract

when such advances

and

payments

are

capitalized

part

of a

modification

of the

existing

mortgage loan obligation. The provision should clarify

that

such advances

and

payments

additional debt

by the

creditors

are not to be

considered

determining whether

there

was

increase

loan amount

or in

calculating

the de

minimis

increase. With this clarification

that

new disclosure

is not

required under such circumstances,

Wells

Fargo would support

the de

minimis

increase being stated

terms of a percentage of the original loan amount.

•

Fees - 226.2o(a)( i )( i )(B)

Wells

Fargo wishes

emphasize

the

need

clarify

and

exclude authorized advances, payments

and disbursements imposed

consumers

connection with

modification under

the

terms

the loan obligation from any new TIL disclosure requirement.

•

Necessary Fees and Expenses - 226.2o(a)( i )( i )(B)

Wells

Fargo strongly recommends

that

the

Board provide

for an

exception

to the new TIL

disclosure requirement

those instances where reasonable fees

are

incurred

necessary

expenses

underwrite

and

process loan modifications. Examples of these fees include

the

actual

costs incurred

for

appraisals, credit reports, recording

fees,

etc.

Wells

Fargo believes

that

requiring

new

disclosures

for

imposing these actual costs

and

fees

will

discourage creditors from

offering

broad workout arrangements

consumers.

•

Decreases in Payment - 226.2o(a)( i )( i

)(A)-(G)

Wells

Fargo fails

to see the

benefit

to the

consumer

providing

new TIL disclosure when

there

are decreases

in the

payment amount

part

of a

loan modification. Moreover,

Wells

Fargo's

loan modification documents contain language regarding periodic payment amounts

and a new

TILA

disclosure would

not add

benefit

to the

consumer.

•

Fees

That

Do Not

Trigger

New Disclosure - 226.2o(a)( i )( i )(B)

Wells

Fargo believes

that

creditors should

allowed

charge

the

actual cost

for

fees

and

expenses incurred

underwrite

and

process loan modifications without having

provide

a new

TIL

disclosure. However,

request

that

the

Board provide clear direction around what

considered "reasonable

fees".

Furthermore, we believe

the

intent

this proposal

will

better

served

limiting

the

fees

that

would trigger this redisclosure requirement

creditor-retained

fees,

excluding

any

fees

that

are

pass-through fees

to a

third party service provider, whether

not

the

fees

are

paid

to an

affiliate of the creditor.

•

Streamlined Disclosure - 226.2o(a)( i )( i i )(B)

Wells

Fargo strongly supports

the

Board's position

permit creditors

rely

on the

delinquency

or default exceptions

giving

the new

disclosures.

believe adopting

rule

that

requires

servicers

provide

full

TIL,

even

streamlined version,

will

result

discouraging creditors

from offering workouts. The Board's concern

that

consumers

will

not know how their loan terms

are being modified is unrealistic as the terms of the modification agreements sufficiently detail

the changed loan terms. Moreover, we do not

feel

that

a streamlined disclosure

will

provide any

greater benefit to the consumer

than

what is already being disclosed in the modification

agreement.

page 10.

•

Imminent

Delinquency

Default

226.2o(a)(

i )( i i )(B)

Wells

Fargo strongly recommends

that

the Board propose an exception to the new disclosure

requirement for loans where delinquency or default is imminent. We believe the

following

recommended changes to the proposal

will

provide sufficient clarity to facilitate compliance:

Loan

Modification That Require New

TILA

Disclosure

Consistent with current rules, no new disclosures would be required for modifications

reached in a court proceeding, and modifications for borrowers in default or delinquency,

or for modifications to current accounts where the borrowers claim a hardship, and/or

the servicer reasonably foresees an impending default, unless the loan amount or interest

rate

is increased, or a fee for the modification itself is imposed on the consumer.

further urge the Board to extend the exception to current subordinate lien accounts where the

servicer

is required to complete a modification under a government-sponsored modification

program. We believe this clarification

will

benefit the consumer and encourage creditors to

continue to offer broad workout arrangements.

•

ARM

Converted

Fixed-Rate

Transaction

226.20(c)

Wells

Fargo strongly urges

that

the

TILA

ARM

change disclosures continue to be provided under

§ 226.20(c). We find

there

to be limited benefit to the consumer in comparing loan terms. In

most instances of a

fixed

rate

conversion, the customer would be unable to compare truly like

loan terms with products offered by another creditor, depending on the remaining loan term at

the time of conversion. The ability to compare like terms between a product from another

potential creditor would be very limited or potentially not applicable for existing legal

obligations.

The additional disclosure requirement and related risks would

likely

discourage some

creditors from providing ARM loan terms with a conversion option. We believe the notice of an

interest

rate

adjustment under § 226.20(c) provides the information necessary for the consumer's

financial

decisions.

•

Third

Party

Fees

226.35

Wells

Fargo urges the Board to permit servicers to charge consumers

third

party fees and actual

costs incurred as

part

of the loan modification process without triggering a new disclosure. These

actual fees and expenses are incurred to underwrite and process the loan modification. Such

third

party fees do not rise to the same

level

of concern or need for the consumer to have an

opportunity to review and compare to other options. We believe the consumer is better served by

allowing

for an exemption from the new TIL disclosure requirement for such

third

party

fees.

page 11.

• Ten Day Safe Harbor - 226.41

Although

Wells

Fargo would prefer to have a 20 day safe harbor period, we do not find the 10 day

rule to be overly burdensome.

Section

F - HELOC

Requirements

•

Prohibition

Rate

Floors

as an

Index

Control

Issue

Open-End

(Home

Secured)

Credit

226-5b(f)

Regarding

the Board's request for comments as to whether to extend the new credit card account

prohibition on floor rates to open-end (home secured) credit

(HELOCs),

Wells

Fargo does not

support this proposal for the

following

reasons.

While

both credit card accounts and

HELOCs

are categorized as different versions of "open-end

credit" under Regulation Z, the

true

nature

and purpose of

HELOC

lending is more analogous to

variable

rate

mortgage lending. Consumers make more thoughtful and careful decisions when

applying

for a mortgage loan or a

HELOC

product by comparison to credit cards. It is the

commonality of nature, purpose and collateral, beyond the simple structure of the variable

interest

rate

mechanism

that

Wells

Fargo believes should be considered in determining the

appropriate legal protections and risk balancing in

HELOC

consumer regulatory protections.

Under the current proposal, the result would be

that

closed-end credit secured by real estate

ARMs

would continue to have floor rates but

HELOCs

would be prohibited from having floor

rates. Rather,

Wells

Fargo believes

that

there

needs to be a continued consistent approach to the

balancing of the risks to the lender and the consumer in variable

rate

credit secured by real estate

under Regulation Z.

Secondly,

as the Board recognizes, unlike closed-end real estate secured credit,

HELOCs

remain,

for

the most

part,

on the balance sheets of most of the creditors who have originated these

accounts.

As such, removing the current contractual provisions of these existing

HELOC

portfolios

may have significant and unintended consequences.

HELOCs

differ from credit card

accounts in numerous

ways

that,

when considered, mean

that

the consequences of this proposal

may

be very different from the impact of the recently enacted similar law change to credit card

accounts.

The immediate impacts to the existing

HELOC

portfolios

will

be greater, as the size of

the average

HELOC

is much greater

than

the average credit card account. Furthermore, under

Regulation

Z, creditors are very limited in their ability to change terms on existing

HELOCs,

unlike creditors on credit card accounts. For example, as of this time, home equity lenders under

Section

226.5b are not necessarily empowered to change an existing floor

rate

term on a

HELOC

solely

based on the regulation change as proposed here.

Lastly,

TILA

and Regulation Z currently require creditors to contract for a maximum interest

rate

HELOCs

for the consumer's protection, the safety and soundness of the home equity

lenders market should be afforded some

level

of similar protection in future economic times by

not prohibiting a reasonable interest

rate

floor. Some institutions, including

Wells

Fargo, permit

their consumers to manage their maximum

rate

risk by offering the consumer to pay a reasonable

fee

at origination in order to lower their maximum

rate

for the

life

of the

HELOC.

In our

experience,

consumers have taken advantage of this feature to help manage their interest

rate

risks.

page

12.

As the Index movement is outside the control of both the consumers and the creditors,

making a reasonable minimum interest

rate

protection available to the creditor doesn't result in

unfair

treatment

of the consumer.

•

Periodic

Statements:

Grouping

Fees

and

Interest,

Separated

from

Transactions

226.

(a)(6)(i)

Wells

Fargo supports the proposed changes to the periodic statements for

HELOCs.

However as

commented in our December 23,

2009

letter,

given

that

HELOCs

have numerous features

that

offer

the consumer differing interest

rate

structures,

Wells

Fargo believes the consumer should be

presented with a periodic statement

that

concisely displays the interest accrued, rates and fees

charged together with the type and amount of borrowing/transaction associated with those

specific

charges.

Wells

Fargo believes such a presentation

will

enable the consumer to more

readily manage their

HELOC.

Wells

Fargo advised in our earlier letter, from an operational standpoint the proposed changes

represent significant and extensive changes to current servicing and statement systems such

that

a two year period for implementation compliance is necessary.

•

Uniform

Total

One-Time

Tolerance

for

Fees

on HELOCs and

Closed-End

Credit

226.i5(a)(5)(ii)

The

Board's proposal to provide for uniformity in the origination fee and charge tolerances for

both

HELOCs

and closed-end loans secured by real estate is appropriate.

Wells

Fargo agrees

that

the proposed $100 tolerance is adequate for both. The Board's proposal to provide uniform

tolerances is appropriate because creditors, in both

HELOCs

and closed-end real estate secured

credit, use

third

parties to conduct the real estate loan closing process. It is this process

that

introduces an element of unknown and execution issues

that

more often implicate fee/charge

uncertainties. It is this commonly shared closing process aspect

that

calls for uniformity

overriding the differences in the

nature

of the credit.

to the Board's proposal to not provide

HELOCs

with the same foreclosure credit limit tolerance

as provided to closed-end home secured credit,

Wells

Fargo recommends providing further

uniformity here, as it is not unusual

that

HELOCs

be in first lien position or in significant credit

amounts.

Section

G -

Reverse

Mortgage

Loans

Wells

Fargo acknowledges

that

the Board is addressing very significant issues with respect to reverse

mortgages in the proposed rule.

Wells

Fargo originates the HUD-insured and regulated Home Equity

Conversion

Mortgage (HECM) loans, and does not originate proprietary reverse mortgage products or a

reverse mortgage product with a shared appreciation or shared equity feature.

Wells

Fargo supports informed consumer choices and applauds the Board's efforts to provide creditors

with

disclosure forms

that

are specific to and designed for reverse mortgage loans.

Wells

Fargo strongly

supports robust independent

third

party counseling as a gate keeper function for all reverse mortgage

consumers, regardless of product, but expresses concern on the imposition of a second layer of refundable

fees.

Wells

Fargo supports the Board's efforts to further clarify rules regarding reverse mortgage

advertising and regulate deceptive advertisements.

page

13.

Wells

Fargo supports

further

rulemaking and

clarification

in the area of offering financial and insurance products with reverse mortgages but also

believes

that

clarification can be made to the Board's proposed rule specifically to exempt products.

Wells

Fargo also supports the Board's decision not to impose a suitability

standard.

Finally,

Wells

Fargo is

concerned with the implementation timeframe for the proposed rule to allow creditors time to make the

necessary enhancements.

•

Proposed

Reverse

Mortgage

Disclosures

226.33(a)—(d)

Wells

Fargo supports the new proposed model forms for reverse mortgage loans. We believe

these disclosures

will

provide more meaningful information to reverse mortgage consumers

than

disclosures

that

currently are required

under

Regulation Z. Current disclosures (such as the

"When

Your

Home is on the Line"

HELOC

booklet and the Consumer Handbook on Adjustable

Rate Mortgages

"CHARM"

booklet) do not provide the information relevant to a reverse mortgage

consumer to make an informed decision on a reverse mortgage.

Wells

Fargo agrees with the Board's analysis of the disclosures

that

would no longer be material

disclosures for reverse mortgages, particularly as to "credit limit" which has always been a

challenging

concept for consumers and creditors when applied to a reverse mortgage transaction.

Wells

Fargo urges the Board to continue to remove the distinction between an open-end credit

reverse mortgage transaction and a closed-end reverse mortgage transaction as it

pertains

disclosures for reverse mortgages. It is our opinion

that

this distinction is not meaningful to a

reverse mortgage consumer when considering a reverse mortgage product and the Board should

drive to a single set of reverse mortgage disclosures.

The

Board proposes

three

consolidated reverse mortgage disclosure forms:

An early disclosure for open-end reverse mortgages,

an account-opening disclosure for open-end reverse mortgages, and

a closed-end reverse mortgage disclosure.

Additionally,

the Board proposes a "Key Questions to Ask About Reverse Mortgage Loans"

document.

The

formatting in the proposed disclosures is clear and easy to

and the information to be

provided generally appears to be the information

that

reverse mortgage consumers should find

helpful.

While the proposed disclosures are significant improvements,

Wells

Fargo has

suggestions, corrections, and clarifications itemized below

that

are needed before the disclosures

become final.

General to all proposed disclosures:

Wells

Fargo requests clarification from the Board

that

the lender is allowed to use larger font

size

for the disclosures and whether

there

is any

flexibility

in the template format.

page 14.

Wells Fargo requests

that

consistent terminology is used within and among the disclosures.

For example, the

terms

"borrower" and "consumer" appear to be used interchangeably.

Reverse

Mortgage Loan Summary disclosure forms:

General:

Wells Fargo requests clarification as to whether all of the proposed disclosures for reverse

mortgages, or what specific portions, are considered "material" disclosures for right to rescind

purposes.

Wells Fargo suggests the Board add tolerances for accuracy of the information provided in the

Reverse

Mortgage Loan Summary disclosures or clarify

that

the current tolerances in

Regulation Z apply (see comment below on APR Tolerances).

In the "Borrower & Property Information" section:

•

Borrower Age: Wells Fargo requests clarification

that

the creditor is allowed to use the

consumer's nearest age at loan closing on the disclosure (see also comment below on

Borrower's Age).

•

Appraised Value: For the early disclosures, the appraised value would be an estimate of

property value as provided by the consumer. Wells Fargo requests clarification from the

Board

that

use of an estimated appraised value in the early disclosure is acceptable.

For a

HECM,

if the estimated appraised value is larger

than

the national lending limit

(currently set by HUD at $625,500) the amount used for purposes of final loan

calculations would be the lending limit not the appraised value. In this instance, Wells

Fargo asks the Board to clarify what value the creditor should use for "property value".

In a reverse mortgage purchase transaction, the purchase price as opposed to the

appraised value should be used for property value. Wells Fargo requests clarification

from the Board

that

the use of purchase price would be acceptable.

property value may be a valuation other

than

the appraised value (as noted above), the

Board

should consider adding a statement

that

the property value used may be other

than

the appraised value for purposes of reverse mortgage calculations. Wells Fargo is

concerned

that

if appraised value is used across the board in all instances, the reverse

mortgage consumer may be misled to believe

that

this is the value used for loan

calculations,

and

that

may not be the case. For example, on a purchase transaction the

lower

of the purchase price, appraised value or lending limit

will

be used for final loan

calculations.

In the "About this Loan" section, while the general examples provided are helpful, this section

allows

for significant discretion. Such discretion could result in the information provided to a

consumer varying considerably from creditor to creditor, which could cause confusion to a

consumer shopping for a reverse mortgage loan. Wells Fargo requests and welcomes more

guidance from the Board on specific model statements for this section.

In the "Payment of Loan Funds" section:

page 15.

Particularly for the early disclosure, Wells Fargo suggests the addition of a statement that

the consumer may change how they have chosen to receive

their

funds prior to loan

closing.

At the time the early disclosure is provided, the consumer may not have decided

how they prefer to receive

their

loan funds.

pertains

to "Monthly

Advance",

Wells

Fargo suggests the addition of

another

option:

Term or Tenure. Reverse mortgage consumers have the option to receive monthly

advances for

life

"tenure",

or for a set period of time or "term".

In the "Fees" Section,

Wells

Fargo questions if a reverse mortgage consumer

understands

the

term

"account opening

fees"

as the consumer

likely

doesn't think they are opening an

"account" but

rather

about a "loan". We suggest use the of

term

"loan costs" in lieu of

"account opening

fees".

In the early disclosures,

Wells

Fargo brings to the Board's

attention

that

some of these fees would be estimates.

•

Historical

Index/Margin

226.33(c)(6)(

i )(A)

Wells

Fargo agrees with and supports the reverse mortgage disclosure showing only the index

value.

It is the historical range of the index value

that

is most meaningful to a consumer. Margin

set at lender discretion; therefore a historical range of margin values is not useful to the

consumer. This would be consistent with

Wells

Fargo's comments to the Board's August

2009

HELOC

Proposal.

•

Borrowing

Guidelines/Transaction

Requirements

226.33(c)(7)(v)

In the "Borrowing Guidelines" section, the "Minimum Transaction" and "Limits on Number of

Credit Transactions" do apply to reverse mortgage loans. The "Limits on Amount of Credit

Borrowed"

does not currently apply to a reverse mortgage loan but may apply in the future.

Therefore,

Wells

Fargo recommends

that

"Limits on Amount of Credit Borrowed" be included and

a creditor can insert "not applicable" if

that

is the case .

•

TALC/Loan

Balance

Growth

226.33(c)(8)

Wells

Fargo supports the Board's proposal to replace the

current

Total Annual Loan

Cost

(TALC)

disclosure with the loan balance table. We agree

that

the

current

TALC

is often confusing and

unhelpful to reverse mortgage consumers. We agree

that

a table

that

shows the consumer how

the reverse mortgage's loan balance grows over time in dollar amounts would be more meaningful

to a reverse mortgage consumer.

Wells

Fargo suggests to the Board

that

the time periods of two years,

five

years, ten years and

twenty years may be more appropriate. We suggest four time periods because a maximum ten

year

time period as proposed by the Board may not be as illustrative as it could be for a 62 year

old

reverse mortgage consumer. This is why we suggest a longer time period of twenty years be

included. We suggest a two year period as opposed to a one year period because one year

provides minimal value to a reverse mortgage consumer, but we

feel

that

a time period less

than

five

years is meaningful.

page 16.

• Annuity- 226.33(c)(8)

Wells

Fargo's opinion

the

cost of, and payments from,

annuity should not be included

in the

loan balance table. Consistent with

the

Board's proposal,

and

other regulatory guidance

this

area,

the

purchase of

financial

insurance product should not be recommended

encouraged

part

of the

reverse mortgage loan transaction.

If the

consumer chooses

purchase such

product

should

done separate

and

apart

from

the

reverse mortgage loan transaction

and

therefore

the

cost should

not be

included

in the

loan balance table.

The

creditor may have

knowledge

that

the consumer

intends

use

their

funds

purchase such

product.

•

Limits

Liability

Comment

33(c)(4)-i

Wells

Fargo recommends

that

the amount

owed

by the consumer should reflect limitations

on the

consumer's liability, particularly

as it

pertains

nonrecourse limit.

•

Set

Asides

Comment

33(c)(8)-9

Wells

Fargo agrees

that

a set

aside

for

repairs,

well

taxes

and

insurance, should

considered

advance for the benefit of the consumer.

•

Assumptions

Used

Calculate

Loan

Balance

Growth

- 226.33(c)(8)( i

)

Wells

Fargo requests clarification from

the

Board

that

any

items paid outside

closing

by the

consumer (including items paid

cash,

out of

pocket,

closing) would

not be

included

in the

assumptions for the loan balance growth.

Wells

Fargo agrees with

the

assumptions

base

the

loan balance growth table

on the

initial

interest

rate

effect

at the

time

the

disclosures

are

provided

and

that

the

consumer does

not

make any repayments during the

term

of the reverse mortgage.

•

Amount

the

Customer

Will

Owe,

Appreciation

Assumption

- 226.33(c)(8)( i

v )

Wells

Fargo does

not

originate reverse mortgages

that

have

shared equity

shared

appreciation feature.

In our

view,

4% per year property appreciation

for

reverse mortgages

that

have

shared equity

shared appreciation feature seems high

given

the economic environment of the past 24 months.

Wells

Fargo's opinion

that

uniform appreciation assumption should

used

for

reverse

mortgages regardless

whether

the

reverse mortgage

has a

shared appreciation feature

or not.

The

shared appreciation feature would not impact the property appreciation.

Wells

Fargo's opinion is

that

separate shared appreciation disclosure should be used if

there

is a

shared appreciation feature

the reverse mortgage.

•

Type

Payments

Selected

Consumer/Discretionary

Cash

Advance

Assumption

August

2009

HELOC

Proposal

Wells

Fargo agrees

that

the

growth feature should

not be

reflected

disclosures

as the

feature

would

be confusing

consumers

given

the uncertainty of the timing of draws

on the

credit line.

the consumer elects for a payment plan

that

accounts for less

than

50% of the principal loan

amount, then

Wells

Fargo recommends

that

in lieu of the Board's proposal to assume 100% is

drawn at loan consummation for purposes of the loan balance growth table, instead the creditor

assumes 50% of the principal loan amount available to the consumer is drawn at loan

consummation. In this assumption, the creditor would also assume the consumer takes no

further advances. This approach provides a minimum 50% benchmark for all assumptions.

For purposes of the assumptions, the Board should clarify

that

"principal loan amount available

to the consumer" is net of financed closing costs.

Credit

Insurance/Debt

Cancellation/Debt

Suspension

Coverage

226.38(h)

Wells

Fargo would agree

that

reverse mortgage consumers are not offered credit insurance or

debt cancellation or debt suspension coverage and these disclosures would not be applicable to a

reverse mortgage loan transaction.

Borrower

Age -

226.33(0X14)

Wells

Fargo's preference would be

that

the Board adopt a uniform assumption for determining

the consumer's age and requests

that

the consumer's nearest birthday be used for the assumption

for

consumer's age. This would be consistent with HUD's

HECM

loan calculations which are all

based on consumer's nearest age.

Use of

Estimates

226.19(a)

Reverse

mortgage creditors have typically used estimates in making closed-end disclosures due to

the product features.

Wells

Fargo agrees

that

it should be clarified

that

the use of the

assumptions in the proposed rule would therefore not constitute estimates. However, areas

remain where the Board's guidance is needed before

Wells

Fargo agrees with a broad statement

that

estimates may not be used in connection with reverse mortgage disclosures. We

call

the

Board's

attention to the APR calculation for closed-end reverse mortgages and our comments

below

on APR Calculation.

Appendix

L/Life

Expectancy

Table

226.33(c)(14)

Wells

Fargo requests

that

the table of

life

expectancies in Appendix L be retained in Regulation Z

as the

life

expectancies are still used by the creditor in determining the term of the loan,

specifically

in calculating the

APR.

It is our understanding

that

the new disclosures would replace the traditional Federal Truth in

Lending

Disclosure Statement required for closed-end loans, however

Wells

Fargo would

appreciate confirmation of this understanding from the Board as the disclosure statement is

particularly challenging to tailor to provide meaningful information to a reverse mortgage

consumer, and requires the use of estimates.

Annual

Percentage

Rate

("APR")

Calculation

226.22

Wells

Fargo respectfully requests clarification on how a creditor should calculate the APR on a

"single

advance" closed-end credit reverse mortgage transaction.

page 18.

Term

- For the APR calculation, it is our understanding

that,

as with the current

TALC

and

other Regulation Z disclosures, creditors use the consumer's estimated

"life

expectancy" as

stated in Appendix L for the term. This is an estimate because a creditor does not know when

the maturity event for a reverse mortgage consumer

will

occur.

Wells

Fargo respectfully

requests clarification of what the term input for the APR calculation should be and

that

the

use of an estimate is permissible.

Amount/Total

of Payments - For the APR calculation, it is our understanding

that

creditors

use the amount of the estimated loan balance on the estimated maturity date (term) for

amount of payments.

Wells

Fargo respectfully requests clarification

that

a creditor should

calculate

this using the estimated loan balance for amount of payment,

rather

than what the

consumer's estate may actually owe (e.g. the value of the property at o% appreciation) and

that

the use of an estimate is permissible.

Wells

Fargo requests the Board's clarification whether or not a reverse mortgage transaction

to be considered a "regular" or "irregular transaction" under Regulation Z, Section 226.22

for

APR

tolerance purposes.

"Key

Questions

to Ask

About

Reverse

Mortgage

Loans"

Document

In general we believe the Key Questions document addresses the most common questions

that

consumers have regarding reverse mortgages. We, however, comment on the

following

as it

pertains to enhancements to the

Key

Questions document:

note

that

the use of the term, "cash" to describe loan proceeds could be misleading,

especially

for a product

that

is not always understood to be a "loan."

Wells

Fargo respectfully

suggests

that

references to accessing the consumer's home equity should be provided in terms

that

support the fact

that

the proceeds are the result of a loan

that

must be repaid. We

suggest,

for example, the terms "loan disbursements", "loan advances", or "loan proceeds".

The

Key Questions Document does not mention the requirement

that

tax and insurance

premiums be paid and

that

the home must be maintained to HUD's standards along with

statements of "no payments." Based on the most recent FFIEC guidance for Reverse Mortgage

Loans,

any statement

that

implies the consumer has no liability until they move or die could

be misleading.

Wells

Fargo suggests the Key Questions Document be made consistent with,

and meet all other regulatory guidance, to ensure consumers are consistently reminded

that

they

will

remain responsible for maintaining the property and for the continued payment of

taxes and insurance premiums required for the property whenever "no monthly mortgage

payments" are stated or implied.

Questions 1 and 8 of the Key Questions Document discuss repayment of the loan without

explicitly

stating

that

the loan balance may be higher than the home value, which appears

inconsistent with other areas of the proposed rules.

Question 4 of the Key Questions Document (second bullet point) mentions "Reverse mortgage

insurance premium".

Wells

Fargo requests

that

the mortgage insurance premium is generally

referred to as "mortgage insurance premium" with the word "reverse" eliminated. This is how

the marketplace refers to the premium and to say "reverse mortgage insurance premium"

implies

that

the creditor is imposing the mortgage insurance premium when it is HUD

that

imposes the premium on a HECM loan.

page 19.

Question 4 of the Key Questions Document (fourth bullet point) mentions servicing fee

"which

is charged each month".

Wells

Fargo requests permission to change this to

state

"which

may be charged each month" as

there

are reverse mortgage products available to

consumers

that

do not provide for a monthly servicing fee.

•

Counseling

Required

226.40(b)(

1 )

Today

Wells

Fargo does not originate a reverse mortgage proprietary product, only

HECMs.

Wells

Fargo strongly supports independent

third-party

counseling for all prospective reverse

mortgage applicants, regardless of the reverse mortgage product.

Wells

Fargo supports properly

trained

reverse mortgage counselors. We support counseling

requirements for proprietary products

that

are "substantially similar" to

HECM.

While

counseling availability for

HECMs

is fairly robust, the available counselors within HUD's

counseling network could be strained if HUD-approved counselors were required to provide the

counseling for proprietary reverse mortgage consumers.

Wells

Fargo's concern is

that

this could

be to the detriment of a reverse mortgage consumer seeking a FHA-insured reverse mortgage

product, which could cause delays in the availability of counseling sessions.

•

Type

Counseling/Face

Face

Counseling

Wells

Fargo agrees

that

either telephone or face to face counseling should be available to

consumers. We agree with the Board

that

in some instances

internet

counseling may also be

appropriate. All options should be available and accessible to the consumer depending on

their

particular circumstances.

Wells

Fargo recommends

that

face to face counseling should be encouraged by all creditors.

•

Counselor

Compensation

226.4o(b)(6)(

i )

Wells

Fargo agrees

that

persons involved in the reverse mortgage loan transaction should not

compensate the counselor for the particular transaction, thereby supporting counselor

independence.

Wells

Fargo requests clarification whether this proposed rule would prohibit creditors

that

originate reverse mortgages from generally compensating a counseling agency which may or may

not also provide reverse mortgage counseling for other types of counseling, such as credit, loss

mitigation, or foreclosure counseling.

HUD-approved counselors are leveraged for required counseling for proprietary products,

Wells

Fargo requests

that

the Board consider allowing general contributions by creditors to the

counseling agencies for use toward counseling for non-HECM counseling in order to assist with

the agencies' additional need for funding sources.

page 20.

Steering - 226.40(b)(6)( i i )

Wells

Fargo supports a list provided to the consumer with multiple counseling agencies however

Wells

Fargo is concerned whether

five

counseling agencies

will

be available in all geographic

locations for proprietary product counseling. In

Wells

Fargo's opinion, a list of at least

three

counselors or counseling agencies would be sufficient for proprietary products.

•

Communications

with

Counselors

Wells

Fargo agrees

that

creditors should not steer a consumer to a specific counselor or agency.

However,

we request a clarifying comment

that

communications between counselors and

participants in a reverse mortgage transaction may be appropriate in limited circumstances such

as to address discrepancies in the information on the counseling certification and counselor

questions to the creditor about features of the creditor's proprietary product.

•

Nonrefundable

Fees

226.4o(b)(2)(

i i )

Wells

Fargo suggests to the Board

that

the new restriction against imposing nonrefundable fees

until

three

business days after the date the consumer was counseled should be, at most, for one

business day, and we question if the waiting period is necessary at all. HUD does not impose a

similar restriction for

HECM

loans. This is an area where the Board's proposed rule conflicts with

HUD's

guidance.

the Board points out,

there

are today, federal restrictions on nonrefundable fees

that

already

apply

to reverse mortgages. With this proposed rule

there

would be two waiting periods on

nonrefundable fees

that

would apply to reverse mortgage consumers. Imposing an additional

waiting

period adds unnecessary complexity resulting in multiple waiting periods with multiple

trigger events. Our concern is

that

this could extend the loan process at the detriment of

consumers.

•

Clarifying

Information

Required

Reverse

Mortgage

Advertising

226.33(e)(1o)

Wells

Fargo agrees with the Board on the first seven statements

that

warrant clarifying

information, and is in support of the correlating proposed requirements.

For statement eight, the Board proposes

that

advertisements

that

mention housing or credit

counseling

must also contain a telephone number and website for HUD housing counseling

resources.

Wells

Fargo strongly supports counseling for all reverse mortgage consumers. While it

not necessarily problematic to also provide the website for HUD housing counseling resources,

Wells

Fargo questions if a telephone number in the advertisements provides additional resources

to a consumer or if it is duplicative of a current HUD requirement. HUD currently requires

that

reverse mortgage creditors provide a prospective reverse mortgage consumer with a list of names

at least

five

local counseling agencies, plus the toll-free phone numbers for

NFCC,

MMI,

CCS

Greater Atlanta, and

NCOA.

This list is to be provided to the consumer in the pre-application

stage,

before a creditor can take an application for a reverse mortgage. If the Board feels

that

telephone number in the advertisement is still necessary,

Wells

Fargo requests

that

the Board

clarify

what telephone number the creditor is to include

given

the multitude of numbers available.

page 21

• Triggered Disclosures in Reverse Mortgage Advertising - 226.33(e)

noted

by the

Board

proposed Section 226.36(a)(1), reverse mortgages

are

subject

to the

general advertising requirements under Section 226.16

for

open-end credit

and

Section 226.24

for

closed-end credit. Under existing Section

226.16(d)(1),

if an

advertisement sets forth certain

terms (so-called "trigger terms"), further disclosures

are

also required. Of relevance here,

if an

advertisement sets forth payment terms, either affirmatively

negatively,

there

is a

trigger

for

providing

full

detailed

APR

disclosure.

One

example proposed

by the

Board

illustrate

how an

may

disclose

the

clarifying

information

proposed Section 226.33(e)(4)

"Never repay during your lifetime,

except

that

you may

have

repay early

some cases such

as if

you

sell

your house

live

somewhere else

for

longer

than

the

time stated

in the

loan contract." Proposed

Official

Commentary, Section 226.33(e)(4)( i i i

Wells

Fargo respectfully requests clarification

as to

whether such language constitutes

"trigger

term"

for the

full

APR disclosure under existing Section

226.16(d)(1)

that

constitutes

"payment term

of the

plan" triggering

the

full

detailed APR disclosure.

requirement

that

reverse mortgage advertisements include additional information which

is a

trigger

for

disclosures under section 226.26

may

easily,

as the

Board points

out in a

similar context,

contribute

"information overload".

•

Set

Asides

for

Property

Taxes

and

Insurance

226.33(c)(4)

i i i and

226.33(e)(7)

Wells

Fargo agrees with

the

Board

that

the

proposed

TILA

reverse mortgage disclosure

and

advertising rules

will

help

highlight with

the

consumer their continuing obligation

to pay

property charges.

Wells

Fargo agrees

that

the

Board should wait

address set-asides

for

property charges

reverse mortgage transactions

due to

HUD's pending initiative.

In our

opinion, proprietary

reverse mortgages should not be treated any differently.

•

Cross-Selling/Anti

Tying

Wells

Fargo,

as a

policy,

does

not

require

reverse mortgage consumer

purchase

annuity

similar financial

insurance product

as a

condition of obtaining

reverse mortgage.

addition,

Wells

Fargo does

not

refer, recommend,

endorse

that

reverse mortgage consumer purchase

such products

conjunction with

the

reverse mortgage transaction (other

than

those products

customary

for the

reverse mortgage transaction such

title, hazard,

flood,

other peril

insurance,

or a

traditional banking product such

checking

savings account

which

the

consumer can deposit their proceeds).

The

area of greatest concern

is a

creditor requiring

reverse mortgage consumer

use

the

funds

available

from

the

reverse mortgage loan

purchase

investment-like product

that

may

not be

the

consumer's best interest. We do

feel

the

proposed anti-tying rule addresses this concern.

In addition

to the

anti-tying proposal,

Wells

Fargo recommends

the

Board prohibit

creditor

from

recommending

endorsing

that

reverse mortgage consumer uses

the

reverse mortgage

proceeds

purchase

investment-like product,

well

prohibiting any practice by

creditor

that

would lead a consumer to believe

that

approval of the reverse mortgage is contingent on the

purchase of such a product.

page 22.

•

Ami-Tying

Proposed

Exemptions

Wells

Fargo's opinion, the exemption for transaction (checking) and savings deposit accounts

from

the products

that

cannot be tied to a reverse mortgage is warranted and necessary.

Wells

Fargo

supports this exemption as a reverse mortgage consumer may want to open such accounts

as a place to deposit

their

loan proceeds.

Wells

Fargo suggests

that

Certificates of Deposit (CDs)

should be included within the scope of the proposed exemption. In

Wells

Fargo's opinion, CDs do

not carry the same risks and complexities as products such as annuities and long-term care

insurance.

•

Products

and

Services

Customarily

Required

Connection

with

Reverse

Mortgage

Wells

Fargo agrees with the Board

that

this exemption for products and services customarily

required in connection with a reverse mortgage is also warranted and necessary and recommends

the tax service fee be included in this exempt category. The tax service fee offsets charges paid to

real estate tax reporting

services.

The tax service

reports

properly tax amounts for loans with set-

asides and delinquencies on loans without set-asides.

•

Anti-Tying

Covered

Products

and

Services

In regards to home repairs, creditors should only require repairs noted on the appraisal, purchase

contract, or home inspection

report

be completed by a licensed contractor. Any other repairs

should not be tied with the reverse mortgage loan transaction.

•

Safe

Harbor

Comment

41-1

Wells

Fargo is of the opinion

that

a safe

harbor

is necessary to the anti-tying rule. A creditor has

little or no influence on what a consumer chooses to do with

their

reverse mortgage proceeds after

the closing of the loan, even if the creditor prohibits the tying of such products with the loan

transaction and does not recommend or endorse the purchase of such products. While the 10

calendar days is acceptable to

Wells

Fargo, any time period beyond the 10 days would become

more difficult for a creditor to adequately control.

•

Suitability

Wells

Fargo supports informed consumer

choice.

In our opinion, the Board's proposals to

enhance understanding through the new proposed disclosures and advertising rules, along with

the required independent

third-party

counseling for all reverse mortgage consumers, serve to

assist the consumer's determination of the appropriateness of the transaction for

their

own

circumstances. These components taken together result in a fully-counseled and fully-informed

consumer.

a result,

Wells

Fargo supports the Board's determination to not impose a suitability

standard.

Reverse

mortgage consumers should have the freedom to make

their

own informed financial

decisions

without the creditor dictating

that

their

decision is or is not "suitable". A single

suitability

standard

would

likely

result in the denial of credit to some consumers who would truly

benefit from a reverse mortgage. page 23.

Making

a creditor responsible for an individual's loan decision would be an unprecedented and

inappropriate shifting of personal responsibility

that

would expose creditors to liability for

decisions

made by the consumer and to second-guessing by heirs and assigns. It would be unfair

to creditors to be judged based on the hindsight

that

follows

after a change in the consumer's

circumstances after loan consummation.

Additional

liability

that

would be imposed on the creditor would add to the cost of a consumer

obtaining a reverse mortgage product and moreover may result in creditors suspending the

origination of reverse mortgage products. This would be an unfortunate result for consumers

who

have relied upon the product to manage the financial challenges

that

frequently accompany

senior citizenship.

Section

—

Rescission

•

Exercise

Right

Rescind

226.15(a)(2),

226.23(a)(2)

Wells

Fargo supports the intent behind the Board's proposal to permit consumers to exercise the

extended right to rescind by notifying the servicer, but is concerned

that,

absent other changes,

this may impair the ability of the current owner of the loan to timely comply with the

acknowledgement

requirement.

While

Wells

Fargo attempts to promptly notify all affected parties regarding any notifications we

receive,

not all servicers

will

be capable of notifying the creditor, or other current owner, on the

same day they receive the notification from the consumer. Moreover, processing errors are

likely

to occur, which

will

delay the communication.

In light of the fact

that

the time for providing an acknowledgment of receipt begins when the

servicer

receives the consumer's notice,

Wells

Fargo urges the Board to consider a loan owner's

ability

to timely comply with the acknowledgement requirement when crafting the final rule. One

method of addressing this concern would be to extend the time for providing a written

acknowledgement

of receipt to 60 days.

•

Rescission

Period

226.15(a)(3),

226.23(a)(3)

Wells

Fargo supports the proposed clarifications regarding whether the consumer's death,

bankruptcy, refinancing or paying off the loan are conditions

that

terminate the unexpired right

to rescind, and believes these clarifications

will

assist creditors in assuring

that

consumers

understand their right to rescind the transaction.

•

Material

Disclosures,

Tolerances

226.15(a)(5),

226.23(a)(5)

Wells

Fargo is generally supportive of the retention of the existing finance charge tolerances and

the proposed adaption of those tolerances to the payment summary and interest rate, loan

amount, total settlement charges and prepayment penalty disclosures. However, as noted in our

December

23,

2009

comment letter on the Board's August

2009

Closed-End Proposal,

Wells

Fargo

believes an increase in the finance charge tolerances is appropriate since, under

that

proposal, a creditor has a reduced ability to control the

third

party costs

that

will

become

part

the finance

charge.

page

24.

also noted in the December 23,

2009

comment letter,

Wells

Fargo believes

that

the increased amount should be adjusted annually, similar to the adjustment of Section 32

high-cost

fee amounts. If the Board does link the tolerances to an inflation index,

Wells

Fargo

urges

that

such an index be adequately defined and explained to the consumer in a consistent

manner across all lending institutions.

•

Notice

Right

Rescind,

Form

Notice

226.is

(b)(2)-(4),

(6),

226.23(b)(2)-(4),

(6)

Wells

Fargo supports the efforts of the Board to simplify and reduce confusion surrounding the

notice of right to rescind. We believe the plain language requirements for informing consumers

about the meaning of the right to rescind, and how to accomplish rescission, are beneficial to both

the consumer and the creditor.

Wells

Fargo also agrees

that

providing one notice of right to rescind form to each consumer

will

reduce confusion and duplication for the consumer. However, we are concerned

that

the addition

a "tear off' to the notice of right to rescind may cause unintended problems. For example, it

may

be difficult for the consumer to fax the odd-sized form, or for a creditor to deal with receiving

a small, non-uniform sized document. The consumer also may not

fully

understand

that

the

upper portion of the document should be retained for their records.

Wells

Fargo accordingly

suggests,

should the Board retain the tear off format,

that

language be added to more clearly

inform the consumer to retain the remainder of the form for their records.

Finally,

an area where the Board did not specifically request comment, but one

that

Wells

Fargo

believes

should be addressed, is the difficulty

that

can be created by requiring two versions of the

notice of right to rescind; one for rescindable transactions involving the same creditor and one for

rescindable transactions involving a different creditor. While we firmly believe

that

most

creditors attempt to

fully

comply with this regulation, it is sometimes difficult to control which of

the two versions is sent to the consumer.

Wells

Fargo believes the appropriate language can be

consolidated into one form

that

could be used for both types of rescindable transactions, and we

encourage the Board to consider creating one uniform notice of right to rescind

that

can be used

in all situations.

•

Time

Providing

Notice

226.15(b)(5),

226.23(b)(5)

For closed-end loans,

Wells

Fargo supports the Board's proposal to provide the notice of right to

rescind prior to consummation. We believe, should the Board finalize the portion of its August

2009

Closed-End Proposal requiring creditors to provide final

TILA

disclosures at least 3 days

prior to consummation, it would be beneficial for both the consumer and the creditor to have the

notice of right to rescind provided with those disclosures. While providing another copy of the

notice of right to rescind at signing would ensure the consumer is signing all documentation for

the transaction at one time, providing the disclosures multiple times could be confusing to the

consumer.

•

Effects

Rescission

226.15(d),

226.23(d)

Wells

Fargo applauds the efforts of the Board in proposing and further clarifying the duties of all

the parties involved in the transaction, including the consumer's duty under an extended right to

rescind to

tender

payment to the creditor prior to any security interest being released. We agree

that

the release of lien should not be required until the creditor has received all funds due from

the consumer.

page

25.

However,

Wells

Fargo is concerned

that

not every creditor

will

be able to comply

with

the requirement, in transactions where disbursement has already occurred, to provide a

written acknowledgement of receipt within 20 days. While the 20 day time period is consistent

with

the creditor's duties today, it is a relatively short period of time in light of the proposals

that

the acknowledgement be accompanied by the creditor's decision regarding cancellation of the

transaction, and

that,

during the extended right to rescind, notice can be provided to the servicer.

Given

the fact gathering and other tasks a creditor must engage in to make a decision on

cancellation,

and

given

the possible delay

that

could occur between the servicer receiving the

notice and passing the notice on to the creditor or

current

loan owner,

Wells

Fargo would suggest

extending the period for providing an acknowledgment and statement to 60 days.

•

Waiver

Right

Rescind,

Examples

226.15(e),

226.23(e)

Wells

Fargo appreciates the clarification

given

regarding the waiver of the right to rescind and

feels

the examples

will

be helpful in making decisions regarding the financial hardship.

•

New

Transactions

226.20(a)(1)

Wells

Fargo strongly urges

that

the Board not expand the number of closed-end transactions

considered "new transactions" subject to the right to rescind. We believe

that

any effort to expand

the number of transactions

will

discourage servicers from offering broad workout arrangements

to consumers.

•

Rescission

Rules

Applicable

Reverse

Mortgage

Purchase

Transactions

(open-end)

Current and proposed Regulation Z does not require a creditor to

give

a consumer a right to

rescind for purchase money funds, but it is required for non-purchase money funds. Therefore, if

a reverse mortgage purchase transaction is structured as open-end credit, the consumer would

have

the right to rescind any non-purchase money funds. The consumer may choose to use all of

the available funds in the line of credit for purchase money funds (this is by far the most

likely

scenario),

or may choose to use only

part

of the available funds for purchase money funds and

part

for non-purchase money funds. This begs the question as to whether the consumer has the

right to rescind the non purchase money funds (we assume they do have this right), and/or the

future

right

repay

the purchase

money

funds

and re-access the

funds

as non-purchase

money.

This

is an issue of first impression and to our knowledge Regulation Z is silent to the issue for a

reverse mortgage transaction.

Wells

Fargo requests Board input on this point.

Wells

Fargo's

opinion is

that

the right of rescission does apply in this situation for both non-purchase money

funds and the future right to repay purchase money funds and withdraw them as non-purchase

money funds in an open-end purchase transaction.

•

Growth

on the

Available

Line

Credit

reverse mortgage transaction

that

is structured as open-end, where the consumer leaves credit

available

in a line of credit, has a "growth" feature. Under a

HECM,

the Principal Limit "increases

each

month for the

life

of the loan at a

rate

equal to the sum of the applicable monthly interest

rate

charge, plus one-twelfth the annual MIP,"as described in Section 1.7 of the model

HECM

Loan

Agreement. Section 2.6.1 of the same Agreement states, "The line of credit amount

increases at the same

rate

as the total Principal Limit increases." Therefore, "growth", or the

possibility

of "growth", is an increase in the consumer's net principal limit, and

thus

the resulting

line of credit according to the pre-established loan agreement.

page

26.

Any "growth" is applied monthly

to the consumer's line of credit.

Wells

Fargo requests Board

input

on whether the consumer

should be

given

a right to rescind any growth

that

is applied to the available line of credit.

Wells

Fargo's

opinion is

that

the right to rescind should not apply to growth.

•

Model

Form

for

Notice

Right

Rescind

In either of these above instances if the reverse mortgage consumer is to be

given

a right to

rescind,

Wells

Fargo requests

that

the Board clarify which model form a creditor must provide the

consumer.