Wells Fargo Accelerates Use of Home Affordable Modifications

Wells Fargo said today that through the first seven months of this year it modified more than 240,000 mortgage loans, this includes 20,219 trial modification starts under the federal Home Affordable Modification Program (HAMP).

More than 90 of every 100 Wells Fargo customers have remained current on their mortgage payments. And, according to March 31, 2009 Inside Mortgage Finance data, Wells Fargo continues to have the lowest delinquency rate of the top four lenders in the nation. The modifications – which include changes in loan terms, interest rates, and principal – were completed with the goal of creating sustainable mortgage payments for consumers facing financial difficulties.

"HAMP is an important part of the administration’s efforts to provide mortgage relief and stabilize the housing market,” said Mike Heid, co-president of Wells Fargo Home Mortgage. "Wells Fargo is proud to have helped the government bring this program to bear, while completing more than 220,000 loan modifications – including trial modifications – under our own programs in the first seven months of the year.”

Heid added that Wells Fargo has appreciated the candid discussions the company has had with the administration on further reducing foreclosures through HAMP, and welcomes the transparency that will be created over time by reporting standardized performance metrics for servicers participating in the program.

"Now that the program details are largely complete, our company has been accelerating our use of HAMP,” said Heid. "We’re confident we can achieve our portion of the government’s goal to reach 500,000 HAMP trial modification starts by Nov. 1.”

Last Thursday, the Department of Housing and Urban Development announced a FHA-HAMP that will go into effect for these customers on Aug. 15. Heid said Wells Fargo hopes that in the near future HAMP can be further refined to more broadly serve other customers, such as those with pay option adjustable rate mortgages (ARMs).

"We encourage all servicers and investors to participate in HAMP so struggling borrowers can be assisted in a consistent manner,” said Heid. "Further, we believe the administration’s ‘second look’ process – through which Freddie Mac will audit declined applications – will promote additional transparency and will help ensure all participating servicers across the country are doing all they can to prevent avoidable foreclosures.”

Wells Fargo already conducts a final quality review to ensure all options are exhausted before a home is moved to foreclosure sale.

To assist homeowners in crisis, Wells Fargo hired and trained 4,000 people in the first half of the year for a total of 11,500 U.S.-based staff. The company also says that within weeks it will eliminate the customer service backlog created by the time lag between when the government announced HAMP and when the guidelines were defined.

"While the majority of our customers who request help are getting through to us and receiving the help they need, we know we’ve fallen short of our customer service goals in some cases,” said Heid. "We've recently undertaken new steps that will soon enable us to qualify most borrowers for a HAMP trial modification during our initial point of contact, and then send eligible customers the required trial modification agreement within 48 hours. During the three-month trial period, we'll work with the customer to collect all of the required items to determine if the modification can be finalized."

In addition to lowering payments through modifications, for the first seven months of 2009, Wells Fargo also completed more than 860,000 refinances for Americans.

About Wells Fargo

Wells Fargo Home Mortgage is the nation’s leading mortgage lender and services one of every six mortgage loans in the nation. A division of Wells Fargo Bank, N.A., it has a national presence in mortgage stores and banking stores, and also serves the home financing needs of customers nationwide through its call centers, Internet presence and third-party production channels.