I just picked up this interview from the San Francisco Gate with John Stumpf the president and chief executive officer of Wells Fargo & Co., the largest banking company based in the West and one of the nation’s dominant financial institutions.
In picking a part the questions and answers along with the numbers that were being quoted, I came to a startling revelation. Wells Fargo has approximately 5,000 thousand homes that are in foreclosure!
As many of you know, I am a critic of how the lending industry is handling the mortgage crisis and in particular, their loss mitigation departments.
Wells Fargo never really participated in the toxic loan environment. They have always been tougher on underwriting guidelines and didn’t offer exotic, made to order, cancerous mortgages that are now taking out homeowners left and right. But that doesn’t mean that they are not experiencing the subprime sickness that is spreading everywhere, including to Wells.
They were conservative in a very unconservative lending environment and their profit margins show that. Wall Street loves Wells Fargo.
They definitely are one of the most respected and well regarded lending institutions in the nation and I have a tremendous amount of respect myself for the CEO John Stumpf and what he has done to keep the company from participating in the reckless lending behavior we have seen over the last 5 years. However, they are still being affected by the subprime debacle.
As usual I will pick out points of interest for my readers and dissect those comments:
“Q: In 2006, Wells Fargo made $83 billion in subprime loans. Are they coming back to roost now?
A: We are the servicer of those loans and we did not originate those. We’re about the seventh-, eighth- or ninth-largest originator of subprime mortgages, so we are not the lead in that category. Because Wells Fargo operates using responsible lending practices, our foreclosure rates are about half the industry average right now. When you look at our own portfolio, what we originate, and what we service for others and did not originate, our homegrown portfolio performs twice as well as the other one.
Q: So half a percent of all your subprime loans are in foreclosure now?
A: One-half of 1 percent of all of our loans. There are about $1.4 trillion of mortgages that we service. That’s about 10 million households and a little over 90 percent of those are prime. We have a very small subprime portfolio.
Q: Well, 10 percent of $1.4 trillion is still a pretty significant number.
A: Yes. Some of those we bought and others we service. That is a good business. We try very hard to keep those customers in those homes. When customers stay in those homes, everyone wins.”
Moe’s Commentary:
Lets do the math. 10% of 10 million homeowners, 1 million borrowers that have loans with Wells are subprime and of that .5% are in foreclosure. .5% of i million is 5,000. Wells Fargo has 5,000 homes in it’s portfolio that are in foreclosure. That is a lot of homes and families!
Back to the Interview:
Q: How common are loan modifications and what are your criteria for making them?
A: When we are a servicer, we’re contractually obligated to service that loan as our investors ask us to. Many times there are four or five investors in a mortgage. These things are cut up and sliced and diced in a variety of ways. We’ve worked with the American Securitization Forum so we could help the investors understand that they have an interest, we have an interest and the customers have an interest that is common.
We are taking and the industry is taking proactive steps to deal with customers and loans on the books. I’m not going to share exact numbers with you, but this is making a difference.
If I can give any suggestions to your readers, it would be: If you have a mortgage and you believe you are going to have a problem at the reset time or now, for goodness sake, call your mortgage banker. Call them and work with them.
We talk with people ahead of time. The success rate of keeping them in their homes is two or three times what it is if they don’t call.
Moe:
OK, he never answers the question of how common they are and what the criteria is. This is obviously the most important part to educate borrowers. Unfortunately, the ever illusive loan modification requirements will most likely never be made public.
Q: How amenable are the investors to work out problems?
A: For an investor, it’s an economic decision. Was it more valuable to keep the customer in the home versus taking it back? In many cases they are very willing.
Moe:
If they have the investors have any brains they will realize that most of these loans are junk, if they do not modify them.
Q: What’s the cost of foreclosure versus the cost of loan modification?
A: That’s a tricky thing. Every deal is different. There are different sizes, there are different situations, there are different products. There is no one size that fits all.
Sometimes a customer can pay it all off within one year because they have had one unusual situation happen. They may be out of a job. In some cases, they can’t even afford the teaser rate, let alone the new rate. Sometimes we will modify. Sometimes we put them in a different product.
Moe:
What he is basically saying is that if you have a lot of equity and it make more sense to foreclose and recoup their fees, then they will. The will put you on a repayment plan 9 times out of 10 because they will get their money back much faster as opposed to allowing a loan modification. If you can refinance, then they will refinance your mortgage.
Q: How hard is it to get investors to consent to modifying loan terms?
A: Part of the difficulty is just getting everybody to agree on common language. Different investors hold different kinds of paper and have different sets of objectives.
If a foreclosure costs $40,000, to pick a number, we say to the investors, “Here are things we want to do with this customer to keep him in his home. It’s in your interest, it’s in his interest, it’s in our interest.”
We have to work with the investors because who’s going to provide the long-term funding to the home loan market going forward?
Moe:
Wow! Think about this for a second. They have to work (please and cater) with investors so they will provide them cash later. Hmmmmmmm…. So where is their best interests? The investors and not the homeowner!
Q: Can you keep the mortgages instead of selling them to investors?
A: Wells Fargo is in a very unique position because we have a very strong balance sheet. We’re keeping jumbo mortgages (those larger than $417,000) in our portfolio. We hope that over time the market goes back to normal and we can sell these loans in the secondary market.
Moe:
Of course Wells is keeping these jumbo loans. NO one will buy them on Wall Street.
Q: Who is responsible for the crazy loans made in the last five to 10 years?
A: There’s a shared responsibility here. The Federal Reserve reduced rates to 40- and 50-year lows. Real estate became a very hot asset class. People started buying homes.
Because of such low rates, new people came into the marketplace. People bid up prices and everybody wanted to be in the game.
Certain mortgage lenders – especially those that were not regulated – helped fill the investor market for mortgage paper. And people who purchased homes in 2001 and 2002 and then sold them in 2005 or 2006 made a lot of money, which fueled this whole thing.
Moe:
I don’t know where he is getting at here, but he kept mentioning people buying homes. What’s that have to do with the “crazy loans” that were made in the last 5-10 years? Nothing!
Crazy loans were designed by lenders and Wall Street to fuel their insatiable appetites to fuel the real estate market with more money and in turn make them more money. This wasn’t about people buying homes. They wouldn’t have bought them if there weren’t these crazy loans available to begin with. Plain and simple.
Q: What about the propriety of teaser rates? You certainly had those.
A: We were not very tantalizing compared to the industry.
Q: Did you do 2/28 mortgages (which have low introductory rates and higher permanent rates)?
A: Yes. Principally, in our finance company (which is separate from Wells Fargo Bank).
Q: What’s that?
A: That’s where we have $21 billion in subprime mortgages. That is a debt-consolidation portfolio. That portfolio had a 0.2 percent loss in the second quarter, which is incredibly low.
This is a situation where customers already owned their homes and they had two, three or four other debts that we put together in one loan underwritten to a fully indexed rate. The reason we do 3/27 loans and 2/28 loans (with low introductory rates) is they typically go to another product because they have made their payments.
Moe’s Rant:
BINGO! BAM! HIT THE NAIL RIGHT ON THE HEAD!
Did you read what I just read? Do you understand what was said right here? The CEO of Wells Fargo said, “The reason we do 3/27 and 2/28 loans (with low introductory rates) is they typically go to another product because they have made their payments.”
Think about this.
They designed these mortgage products as ”short term” loans and not “long term” loans. They knew that these loans were not for long term affordability but they made them anyway with the intentions to refinance them into an another product. Unfortunately, like millions of homeowners, even the CEO of Wells Fargo assumed they would have mortgage products available to refinance borrowers out of these teaser, toxic loans. Just like the millions of homeowners that took these bad loans and the thousands of licensed and unlicensed professionals that sold them.
Don’t you think that they have a responsibility to fix these loans that they made because they knew that they would not be affordable in the long term? That lack of foresight by lenders, combined with a lack of willingness to modify these toxic loans is bringing down our whole country’s economy with them into financial ruin.
Please make your voice be heard and comment on this post or go to my forum at www.LoanSafe.org to openly discuss these issues and meet other homeowners that are stuck in these toxic loans. You are not alone!
Moe
Founder & Homeowner Advocate
LoanSafe.org
LoanWorkout.org
951-271-6283 Phone
800-734-8819 Fax
Moe at LoanSafe.org Email
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Great find, Moe… that sure does add some insight into how Wells Fargo amd many other top industry leaders were thinking as they cashed their fat checks.
Thanks Paul! What amazes me about this article is how he said “The reason we do 3/27 and 2/28 loans (with low introductory rates) is they typically go to another product because they have made their payments.”
That sums it all up right there. Typically that used to happen. NOW, HOMEOWNERS ARE STUCK IN THESE LOANS WITH NO WAY OUT!
WELLS FARGO, dba,
AMERICAS SERVICING COMPANY
TURNING THE AMERICAN DREAM INTO A NATIONWIDE NIGHTMARE
My lovely home of seventeen years is up for a Sheriff’s sale on October 3, 2007. My home. I pray Disaster Relief is made available immediately for families in crisis. For a record number of home owners, the American dream is currently a nightmare.
Wells Fargo dba American Servicing Company (ASC) hopes to take my home. The balance on my loan is very small, less than half of the home’s appraised value. My mortgage payments are low, I can afford them, and I have always made them on time. My mind spins as I try to understand how something like this can happen. But the truth is nothing is for certain.
Last February, I received a letter from ASC. Effective immediately, my mortgage payment increased 200%! I called Customer Service and was told my payment increased due to a negative balance in my escrow account. I told them they didn’t escrow on the account, had never escrowed on the account, and I confirmed with them my monthly mortgage payment would not change. They told me I would receive a letter confirming the details we had discussed within 7 to 10 days.
I was to learn letters with good news never came. Somehow the letters threatening foreclosure were relentless. At first I tried to talk with the same employee who had promised me he had “noted everything in the record” and “he had discussed my account in detail with his supervisor to make sure all the problems on my loan had been fixed.” agent who just promised you all was taken care of arrived confirming assured me over and over and over, that yes, definitely this time, they had truly made the corrections I thought had already been made. And they definitely would be reinstating my loan, the one I thought had already been reinstated. I was always told I would receive a letter confirming all was well with my loan. But the promised confirmation letters never came. And I always ended up calling Customer Service again,
November, ASC suddenly, without reason, began to escrow on my loan. They had never escrowed before. I didn’t receive any notification or indication that they planned to begin to escrow. But their error, and they do readily admit it was their error, was not But ASC paid two additional property tax property tax two more times, and paid the annual premium for home owners insurance. I always paid them monthly. .
On August 14, I was told, again, my loan had been reinstated. While waiting again for another confirmation letter that never comes, I call them again. I I didn’t contact anyone else for help because I didn’t think I needed to. ASC was always so sorry after they didn’t follow through on one of their promises. Then they reassured me all was well. I was very stupid.
But ASC made an error, and that’s OK. But their error, and their inability to quickly correct their error, I might lose my home. My home
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argo to Foreclose on 5,000 Homeowners | Loan Modification & Loan Workout News thanks for this post! Andy
It is very fustrating. My husband and I re-financed our home 3 yrs ago with Wells Fargo, (before 2005), we have been in our home for 10 years. We had hoped we could re-finance our home before our loan adjusted which it did adjust on 11-3-2007. We could never re-finance because somehow our home would not appraise for what we owed. Go figure, how Wells got it to appraise for so much I will never know. We have been in Loss mitigation for 5 months now with no results. Our payment now is more than we can pay and still have living expenses (and I am talking about things like utilities and groceries). The only thing that qualifies us for this plan set forth is our credit score which has been trashed by all this. All we asked Wells to do was give us a fixed rate and add some years to mortgage which they refused to do. We could have kept house and they would still get their money. Mind you we are not stupid people who bit off more than we could chew. We really thought we could re-finance before the adjustment. We had almost perfect credit before all this drama. Maybe we should have just filed bancruptcy 3 years ago instead of re-fincing house to consolidate bills. I think we would be better off today, and that is a shame. Oh yea , our loan also re-sets every six months now. I am about to hand over the keys. I am sick of it.
I just found out that Wells Fargo is the mysterious investor who needs to be contacted to modify my loan with Countrywide. What does this mean I wonder. Wells Fargo didn’t participate as vociferously as other lenders in the toxic slime fest but they bought the loans from other participants?
Kelly, what happend to you is truly tragic. One item you may not be aware of is that lenders love to foreclose on properties with a lot of equity its a win for them. I am always highly leveraged on my mortgages (to the max) which puts me in better negotiating position, the lender doesnt want my house they cannot make any money on it. It never pays to have to much equity, plus equity in your house has no rate of return. Think of this, had you had your money set aside earning you a rate of return you could have made the payment and gotten an attorney to help you with a law suit which I am sure you would have won. I am only in favor of equity accelaration for the purpose of repositioning equity as soon as possible. If your interested about learning how to improve you finances and utilizing a mortgage as a financial tool check check out http://www.dollardestination.com. I wish you all the best and hope you still have your home.
Gabriele,
I so needed to read your caring post just now. I read ones from people who think I’m just trying to get a free home, and I cry. This has been such a long fight.
I wish I could get that equity out before the sheriff sale on 1-02-08.
I will look at your dollardestination site. God Bless, and thank you for caring enough to write.
before I brougth my house my rent was about $1600 the broker was told me your morgage will less then that I told her I cant close without a comment letter she told me if I refused to close Iwill lose my $19000.00 at the closing table I know my payment is about 2,772 after she make fake checks fake banck stement money I never had now she told me to move out without court order and he’ll pay me back in the side I said no now she send me to forclosure I need justice
I am in this mess right now, Wells Fargo bought my loan from another Broker who now is Closed, Guardian Loan Co. is headquartered in Clifton Park,NY. I was not explained all the stips on all sheets, being a first home buyer. I saw a loan breakdown sheet showing me my payments for the next 30 years, all seemed all explained. After the 2/28 adjusted, whoa I cannot afford it. $534 more a month. Well, make it short, im in a loan modification now, waiting approval, but they are dragging. All payments I make are late, charges are mounting. I am like, they are not here to help, they are here to mess with your mind. I want to see the original papers I signed, I want to take this and turn the tables on the Bank, I am not giving up, I want my house, but i refuse to let them make me feel I made this mistake. Im relaxed, its them who need to worry, help me find a way to turn these tables, I know they made a mistake somewhere, someone has to find the loophole.
Moe is in the know
Would people that didn’t have any savings and bad credit be out looking for a house in the real world? They purchased a home with a liar loan. They or their mortgage broker lied to get these loans. Everyone Lied.
A banks Job is to assess risk. So the banks new everyone was lying. The banks new there would be defaults. They packaged this junk into SIV’S (Structured Investment Vehicles) and sold them to investors. They took the profits and transfered the risk. Now the investors are getting burned and it’s down to the lawyers. It’s a mega greedhead, ultra scam, train wreck. Who out there wanted a loan that had no chance of adjusting down only up. No one. Any broker that sold one of these just told the client you can’t qualify for anything else, come back and we’ll fix it when the prepayment penalty is gone. A churn for them, yet another burn for you. Had this filthy rubbish been regulated the creeps that conjured up this crap would not have had the opportunity to rape and pilage and entice brokers( by rewarding them with more money) to pedal this snake oil. Had these products not been available the trap would not have been set. Moe Knows
Wells Fargo makes a fortune screwing people through their fraudulent servicing practices. Bogus late fees, not posting payments, lying through their teeth about everything, charging ungodly repayment plan downpayments, giving 10 day deadlines but you receive the letter on day 9, sending conflicting information in separate letters from 2 different departments on the same day, kicking people off of repayment plans for false made up reasons and then requiring the whole application downpayment process begin again for a new repayment plan only to be kicked off again for nonpayment when you are holding the canceled check in your hands……..
This was my life from 11/08/2004 until 3/13/06…I gathered up all my canceled checks, Wells Fargo letters and every other piece of evidence I had and hired an attorney. Wells Fargo fleeced over $25,000.00 out of me during their reign as financial terrorists. They ruined my credit and attempted to bleed me dry. They disabled my credit options so I couldn’t refinance away from them. No matter how much I paid to make the foreclosure go away it never did. They just wanted more and more and more and dangled their foreclosure complaint over my head the whole time.
After months of going the legal route they finally realized we meant business and they were going to lose big time if a jury heard our story and looked at our proof. They offered a ridiculous settlement offer which did nothing but insult us. Finally as the trial date neared they offered to give us all of our money back, fix our credit, waive all fees and interest from 10/04 to now, rewrite our loan at a much lower fixed rate, dismiss their foreclosure complaint and pay our attorney fees.
Have they ponied up on their promises?? Hell no. They are liars and cheats and swindlers. They have delayed the settlement for nearly 3 months and I’ve drawn the line.
I informed my attorney to notify the court we are going foward with our case. Time’s up you lying scumbags….see you in court.
here’s the link to see where Wells was in originations of sub prime. In Q3 07 they were #1. From everything I read the banks are definitely not showing losses on the books. Look at the newspaper… WAMU, Wells, B of A have been doing a great ad campaign to get more people to open Savings, Checking Accts. Guess Why????? NO CAPITAL……. I’m beginning to think the safest place for you money is under your mattress…
http://data.nationalmortgagenews.com/freedata/?what=bcor
Wellsfargo really doesnt care if you lose your home they are only out to protect their own name. I called them 10 months before i knew i was going to have a problem with my mortgage. I did explain to them that I
fell and did hurt my arm and did get a staff infection and to do something to save my home before i get in trouble.Remenber 10 months before.What was said to me call back a month before you cant pay.Well now im 5 months behind and losing my home.I was lied to twice about my loan modification the terms were changed do to attorney fees that were to put on my payments.I was told that i was to only make my 6.0% mortgage payment for 3 payments of 3072.00 and the forth payment would be modified on the phone and this person name is Barbra who works for the collection dept for wellfargo modification dept.Well after getting the terms in the mail i did notice my 1st payment was 3072.00 but my next two were 3778.00 because they tact on attorney fees.But for some reason that was my old mortgage payment but they did tell me those are attorney fees bullshit.Ive been working with company for ten months and they only care about thier best intrest because they are a large company and can.Dont be fooled by these jerks.Because if you believe them like I did you will losing you lifes savings like me because no one in a large corperation really cares.My advice to anyone who gets hurt like me that caused this hardship dont trust your mortgage people because they are onle trained to say yes until they take your home.O ya you will also never deal with the same person it will be 20 millon other people.And you will always get a diffrent answer so record everyhting that is said and dont tell them your recording and you will see how many diffrent answer you will get.Wellsfargo does really suck.
IF someome from wellsfargo does really care they should contact people who are in foreclosure and bring down intrest rates to help those who can really afford to keep their homes today in stead of being so @#$%greedy.Bacause idid send in my hardship letter and bank statements and tax forms and everything that was asked from me to only talk to twenty diffrent people who all told me something diffrent was not right..And the last person who I talked to hung up on me and her name was KYE and she works for the loss modification dept.And I also spoke to DEBRA in the same dept but was nice but only trained the way wells fargo wants her to be .then I spoke to JANETT hell no answers but only to say o well we cant lower your payment.and raising her voice every time i said something.well guess you will have to move.And I spoke to Flouand john and mark and justin and alice and babra.ALL DIFFRENT ANSWERS…I GUESS I WILL HAVE TO MAKE THIS PAYMENT TO KEEP MY HOME BUT I LOST EVERYTHING ELSE MY CARS CREDIT CARDS AND MY CREDIT AND MY LOAN IS STILL NOT MODIFIED AND I AM STILL IN FORCLOSURE I THOUGHT IT WAS THE FEDRAL LAW TO HELP THOSE THAT NEED HELP……
DON’T TRUST WELLSFARGO UNLESS THE CAN PUT WHAT THEY SAY IN WRITING FIRST AND IF SOUNDS TO GOOD IT IS…THEY CANT HELP YOU LIKE THEY SAY.
DON’T TRUST WELLSFARGO UNLESS THE CAN PUT WHAT THEY SAY IN WRITING FIRST AND IF SOUNDS TO GOOD IT IS.
I FORGOT TO SAY THIS I DID TRY TO REFINANCE MY HOME LOAN AFTER I FELL AND DID TRY TO PUT MORE MONEY DOWN BUT THERE WAS NOT ENOUGH EQUITY LEFT IN MY HOME BECAUSE TO MANY PEOPLE IN LASVEGAS LEFT THEIR HOMES.WHEN I DID CONTACT WELLS FARGO THEY TOLD ME SORRY WE CANT DO NOTHING EVEN THOUGH WE GAVE YOU THIS BAD LOAN. WELL WELLSFARGO IF I CANT STAY AFLOAT YOU WILL JUST HAVE ANOTHER EMPTY HOUSE AND I PROMISS I WILL TAKE EVERYTHING OUT THAT I PUT EXTRA IN INCLUDING THE LAWN.YOU WILL ONLY GET THE SHELL. O YA NICKIE MY LENDER FOR WELLSFARGO SOLD ME THIS LOAN AND MY CREDIT WAS GREAT WELL INTO THE 700 HUNDREDS AND SHE SAID THIS IS THE BEST LOAN.SHE LIED AND I HOPE SHE GOES TO JAIL FOR BEING A ASS FUCK LIAR AND A THIEF TO FILL HER OWN POCKETS.
Well I must say what an array of problems…I have attempted to short sale 4 houses in tampa, florida over the last year and what a disaster…and all I am doing is trying to keep the borrowers out of foreclosure and get the properties off WF’s books but these people are impossible…case in point right now, I have a house that has mold, termites, repairs galore, next to a Phone Truck Plant and I have had it up For Sale for 69,000. and now 49,000. for over 4 months without one serious buyer and I offered WF 58,000. and they keep insisting the house is worth $100,000. and they did the appraisal from their offices without coming out. WF/ASC is going to have more REO properties than they’d like real soon.
My home is not worth the stress anymore. I am getting a U-Haul and I am loading everything up. Im taking all my window coverings and blinds. Im taking all my appliances and air conditioner. Im pulling up my grass and my beautiful trees I planted. I am scraping up my extremely expensive garage floor epoxy coating. I would take the carpet too but my dogs peed all over it. I am moving down the road a bit to an even bigger and newer house that has never been lived in before. The rental payment is only half of what my mortgage payment is. I wasnt born yesterday. Good Bye ASC (Wells Fargo) good riddence. PS: I hid the keys, have fun finding them. Oh and by the way ASC be sure to disclose to the new owner that the house has a documented mold history. You wouldnt want to get sued now. JB Lawrence.
We are victims of Wells Fargo bait and switch mortgage. Adamant about having a fixed 30 year loan and being pre-approved for such, at the closing table, the documents revealed a 30 year loan with 1st 10 interest free. That means payments double in 10 years. It IS a subprime loan. Our FICO is rated A. Walking away was NOT an option as that week movers were showing up to pack us for the cross country trip. To not close meant losing the house, and the job/promotion we were moving across the country for.
Now Wells Fargo won’t let us refinance through them…they use Zillow online (don’t have to tell y’all why that is wrong) for their appraisal, and our appraiser says the house is work 80k more than we owe. Wells Fargo insists it is worth 70k less than we owe. We are hoping a mortgage broker can help. There should be criminal repercussions for the bait and switch game. Wells Fargo insists it’s the broker’s fault, but they’re the ones that did the change at the last minute ,when they knew we couldn’t walk away. They had 2 months to let us know the terms were changed. We were told we qualified carrying 2 mortgages (our old house hadn’t sold yet), just that our fixed interest rate would be lower if we sold the other house before closing. Nowhere at no time did they say they were going interest only until they snuck it into the paperwork. The truth in lending does not resemble what we were given at all. (umm….30 year fixed does not equal interest only in any definition).
I have found that contacting the Better Business Bureau and the Comptroller of the Currency for National Banks with complaints and disputes elicits and almost immediate response from Wells Fargo Home Mortgage. Please do just to keep them honest and help out others.
Wells Fargo Bank stole my home, over $100,000 in equity.
They finally wrote letters to acknowledge the errors they made on my escrow account.
They credited over $12,000 to my mortgage loan they’d added negligently.
They removed their negative reports to the credit repositories.
Then, as I enjoyed the 1st stress free week in over a year, they sold my home.
I am now homeless in Overland Park, KS. Service to Steal. Watch out for Wells Fargo.
Foreclosure is Wells Fargo Banks specialty.
Kelly L. Hansen, Newly Homeless in Kansas
ctsmyhon@yahoo.com
504-579-2340
913-273-1448 Fax
Thanks Wells Fargo Bank for Stealing My Home. You need some warm blood pumped into your veins.
Anyone who has already lost their home with Wells Fargo or, who are having issues and have had issues since day one making payments, needs to get their loan documents out and review each and every line to see just what the loan officer did that you were not aware of. If you think you have a subprime loan, either review your own documents or do an internet search and find an attorney involved in a lawsuit with Wells on behalf of another homeowner and email them your story. If he/she feel you may have a case they will review the records for you. That’s what I did for my kid and we have found that the loan office, when putting the application in front of them on settlement day, failed to include almost $700 worth of month debt that they had at the time. I couldn’t figure out how the hell they got the loan and now I know. That makes a 10% difference in the debt ratio. If you have a subprime loan, chances are, someone somewhere did something in order for you to get it that you are not aware of, especially if you’re dealing with a real estate firm that owns a mortgage company. Long and Foster owns Prosperity Mortgage and Wells Fargo is listed as the parent company to Properperity Mortgage. It is a marriage made in heaven for everyone but the borrower. These types of associations are supposed to by law be divulged in writing with signatures. I hope my advice helps someone keep their home. It’s too late for my kid but trust me when I tell you, someone will be held accountable for this either criminally or in circuit court. When they give you hundreds of papers to sign at settlement table and amongst them is the application with wrong information, what are the chances of you noticing that?
Like all those above, I too, was run ragged by Wells Fargo. I bought my townhouse in Aug. of 06,and a year later, I lost my job and had to take one that paid $20k less. Shortly thereafter, I called Wells and tried to refinance. I “didn’t make enough” to refinance to a lower rate, and was told I needed a co-signer!!
I struggled along for 6-7 months, and had a child get desperately ill. I had to use monthly money to pay medical bills. Again, Wells was no HELP! I spoke to someone in loss mitigation, and each time it was someone different with different advice. I filled out all kinds of paperwork, wrote a hardship letter with documentation, and faxed it to thenumber given to me.
I put my home up for sale, and for some reason, Wells NEVER RECEIVED my paperwork….so a short sale was never approved. They began foreclosure proceedings. I again sent all documentation, and sent it return receipt…..and here I am, a few months later filing Chapter 13 to protect myself.
Wells said that they DID NOT RECEIVE my information!! Every time I called, it was yet another person, and at one point, an employee was yelling at ME telling me to “stop yelling at him.” That was the kicker. I am filing bankruptcy….they can have my property and I will move on with my life. They are criminal.
I have a client who just signed with us this week. He is three months behind on his payments and tried to work with his servicer ASC, who is a part of Wells Fargo now.
He sent in a financial worksheet showing his income and expenses, and someone from loss mitigation (supposedly, thought I can’t imagine this would come from someone who knows anything about loss mitigation and modification requirements) told him his expenses were too high and that he’d be denied a modification because he didn’t show positive income. Either the person who gave that advice is blissfully stupid, or maliciously deceitful because that advice would cause my clients modification to be declined. You don’t show financial hardship by having more income each month than expenses. That’s the opposite of hardship, and ASC was sabotaging his efforts, hopefully not on purpose.
Luckily he found my company and he definitely qualifies for a hardship modification, and should see a significant payment/rate reduction. If he had continued trying to ‘work’ with ASC, he’d have found himself in foreclosure, which would have hurt all parties involved since he is so upside down in his home.
Be careful when dealing wth ASC.
. My client then had to ‘adjust’ his true expenses to show a positive cash flow.
Like the last repsonse we too have been dealing with the loss mitigation department and like his client you talk to a new person every time..or they transfer you to another department that can’t help anymore than the first. We too have sent in a hardship letter and proof of income. What we were told that it would be processed and someone would be getting back with us within 10 days…that was back in January. Still waiting. When you talk to these people you have to devote hours on the phone because every department has something entirely different to say to you. My question back to them was didn’t the previous customer service rep chrono this discussion? Obviously not because when I refer to my previous conversation(s) they say they know nothing….hopefully this can be resolved very soon! If not, we might become a statistic…
The big problem is that too many people tried to buy what they could never afford. The federal programs are designed to make the banks look like they don’t care. Read the actual requirements to get these “bail out” loans. It is nearly impossible. Think before you sign anything, if someone tells you to jump off the building and the street will turn into marshmallows while you fall would you believe that?
We have a loan with Wells Fargo Financial. What started out having a personal loan back in April 2006, and wanting to get a lower interest rate so we can it paid off quicker, turned into us refinancing our mortgage. In August 2006, we provided documentation to the rep at Wells,the previous W-2’s for two years and pay statements. My husband was employed by two different employers at the time. I had a vehicle that was suppose to be listed in the loan, due to debt to income ratio, however, 10 days prior to signing the loan, the car was totaled in an accident. Asked to have the car removed from the home loan and was told no, due to debt/income ratio. The ratio would have changed anyhow since the car was a total loss and insurance would have covered the balance owed. Also, was provided a loan for $21,000 more than the value fo the home. Long story short, we were stupid to sign for this loan, we admit that! It was an interest only loan for 40 years with an 8.2% rate. Told that we would be able to refinance into a fixed rate in two years with lower payment. Oh yeah, we had no escrow included, actually told we would like it that way. In Dec. 2007, we contacted the office that had our loan, informed them we were starting to struggle to make the payment each month. We were taking money off the credit cards to keep up with the payments. After several times speaking to a rep, Home Preservation finally spoke with us and questioned why we were struggling. When we mentioned my husband’s 2nd job was basically gone, we were asked “what 2nd job?”. They finally did a modification which saved us less than $400 a month, but was still not enough. In Sept. we went late with the payments again, and never recovered. We have spoken to so many different reps who were rude and down right mean. We finally made that heart breaking decision to file for a short sale and listed the house. Since Dec. the house has been listed for sale and never heard from anyone at Wells Fargo since. Never received anything in the mail stating they were willing to allow us to do a short sale, or how one works. Now, we had an offer for $94,000 less than owed on the home. We turned it down since we just found out we would have to report that $94,000 as earned income on our taxes for 2009. Which means we would be in debt to the IRS for over $18,000! Through this journey, we have learned that this is a fraudulent loan to begin with and now we are losing our home because of it. We have tried time and time again to get help from this company and basically no one cares. My husband has tried for over 6 weeks trying to make contact with the guy that is overseeing our short sale at Wells and the guy would not call him back. When my husband finally spoke with him the other day, the guy was so arrogant and told my husband that we should accept the offer and “lets get this done and overwith”. We are refusing to accept the offer until we have a written letter signed and notorized in our hand from Wells releasing us of ALL financial liabilities for the difference owed and the taxes that would have to be claimed as earned income for this property. Our tax guy said that the banks can grant a 1099 releasing the homeowner from the tax liability if they want, they have that power to do so. If they don’t release that to us, then we will allow the house to go to foreclosure and just walk away. Either way, we get nothing from any of this when said and done. With the Mortagage Debt Tax Relief Act 2007 in place, with a foreclosure you are excluded from paying taxes on the foreclosed loan. If I had money right now, I would obtain an attorney and sue Wells Fargo Fianancial for providing us with a fraudulent loan. Hopefully someone will read this and think twice before EVER having a home loan with this company.