Wells Fargo Analysis: 50% Fail HAMP Eligibility


Wells FargoWells Fargo has 523,336 borrowers either in trial or approved mortgage modifications as of March 31, more of them as part of the lender’s own foreclosure prevention efforts.

Of those, 144,932 are part of the government’s Home Affordable Modification Program, HAMP, with active trial and completed modifications, also as of March 31.

Wells Fargo, which services about 16 percent of U.S. mortgages, said it initiated or completed three modifications for every one foreclosure sale on owner-occupied properties from October 2009 through March 2010.

In a statement providing an update on its foreclosure prevent efforts, Wells Fargo offered a glimpse into its analysis of the HAMP program’s troubled rate of assistance, with as many borrowers falling eligibility as those approved for the full term of mortgage relief.

Wells Fargo said half of the 138,000 homeowners who have made three HAMP trial payments as of March 31, will be offered modifications for the full term. Of the rest, 30 percent are expected to be deemed not eligible after documents are received, and another 20 percent will not provide some or all required documents.

The U.S. Treasury released HAMP’s March update Wednesday.

Overall, HAMP’s approved modifications for its five-year reduced-payment term is up to 227,922 borrowers, representing about 19 percent of all trials started. The program’s number of borrowers whose trial or approved modifications have been cancelled because of default or other reasons is 158,052 borrowers – about 13 percent of those who started trial modifications.

“HAMP is the starting point in our efforts to help borrowers facing financial challenges, but we been very successful in finding other workout options when a customer is not eligible for HAMP,” said Mike Heid, co-president of Wells Fargo Home Mortgage.

On April 5, Wells Fargo initiated its part in HAMP’s new Home Affordable Foreclosure Alternatives (HAFA) program, which provides incentives to servicers and borrowers who work on short sales or deed-in-lieu of foreclosure. Although all parties have to agree on the terms and short sale price, HAFA provides principal forgiveness on leftover mortgage balances.

Heid and counterparts at other top lenders testified this week before a House panel seeking feedback on HAMP’s expansion plans into principal forgiveness. The mortgage servicing executives expressed some reservations about the fairness and expense of mortgage writedowns.

Nonetheless, Heid said that Wells Fargo had initiated writedowns before HAMP was launched in 2009. The lender completed more than 50,000 modifications, with a total reduction in principal of more than $2.6 billion.

“On average, customers received a 15 percent reduction in principal amounting to greater than $50,000, and when combined with rate reductions and term extensions their average monthly payments dropped by 25 percent under the terms of their loan modification agreements,” Heid said.


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14 Responses to “Wells Fargo Analysis: 50% Fail HAMP Eligibility”

  1. Shirley Holmes says:

    I have Wells fargo for a lender unfortantly, the reason people fail is because they have people that are not trained, and they show no need to really help you, I have left messages for a mortgage negotiatorto contact me because refuse to speak with me when I call. I am 38 years old, I went through a divorce, and have lost a large income, no child support my son is 18 and just enlisted in the air force, I was behind for over a year, overwelmed with bill collector calls, my mortgage was behind more than 3 payments. wells fargo put me on the plan to modifiy and then before the second note was due took me off, said I couldn’t afford the home. At the payments I have now I probably won’t be able to but at the amount they gave me on modification new amount I could have, but they didn’t even tell me they took me off. They just sent me a ballon $8,000.00 paymnet due at once after 3 months, like i could really afford that. The hit me with inspection fee of the home almost every month for $75.00 a pop. When i was in contact with them at least once to twice a month paying whatever I could to catch up so not to loss my home. The kept sending certified paperwork, even with me calling, charginf me fees for that and whatever else they could tack on. then knowing I was calling in with different amounts when I had extra money making what ever payments I could to catch up, when I finally made the last payment to catch up, about a week or two later I get a letter saying they recommend that I short sale. I am killing my self to get caught up and finally do after selling items, saving, not have one dime additional let over for me or my son, they sent me that letter, I called back to see if now caught up if they could help me and they say there is no plan to help me. So how is the new plan going to help people, Wells Fargo just finds reasons to turn you down, if they are not made to do it it won’t happen, I should get help, I make enough money to afford the home if I had reasonable mortgage payment, but WELLS FARGO

  2. m.l. gates says:

    how do you like this one? i have been trying to get a modification for over a year now due to a 50% decrease in income. mind you this is the 2nd home wells fargone has been the servicer on and for 14 years i never had one late or missed payment. let’s make an absurd and long story short. I GOT A DENIAL LETTER FROM THEN SAYING IT WAS DUE TO MY FAILURE TO COMPLY WITH MY LOAN MODIFICATION GUIDELINES! i was NEVER offered a modification. what do you want to bet they are going to count me in the number of consumers who ‘failed to comply with the trial modification’. what stench. it is too sinister and diabolical to believe. if i wasn’t living it i would not think that it was true. try calling your local media and senators. many of them will be helpful. i have had two stories covered a third is pending and one of my state’s senators has agreed to try to intervene for me. it beats doing nothing! the least we can do is shed some light on this mayhem. we bailed the whole lot out didn’t we?

  3. Elwood says:

    To Shirley Holmes:

    You should demand proof from Wells Fargo actually performed the inpsections that they charged you for. I was charged for one of Wells Fargo’s “inspections” on a date when there were several people at my home. The written report made fraudulent claims such as “inspector met me at my home”, “inspector entered home”, “inspector verified utilites were own” etc, etc. I brought this to Wells Fargo’s attention believing that Wells Fargo was an honest company that had simply made an honest mistake. However, it became clear that Wells Fargo is doing this deliberately and on a much larger scale than just me. Research the trial of Dorothy Stewart vs. Wells Fargo. In the trial it was discovered that Wells Fargo charged Ms. Stewart (an elderly widow) for two “inspections” when her entire parish was under evacuation order for hurricane katrina. Wells Fargo is not performing most, if not all, of the “inspections” that they are charging their customers for. The security instrument does not allow them to charge you for fictional services. If they refuse to provide you with proof that the service was performed (which is exactly what they did to me) you should refuse to pay for the fictional “inspection” that they are forcing customers to pay for. FYI – Wells Fargo is collecting more than $100 million each year off of this fraudulent imaginary service

  4. Dave Andeson says:

    I have a fraudulent loan generated by Wells Fargo. Mike Heid, their Senior VP even is aware of this. Once I found out the depths of duplicity by Wells Fargo, I tried to find out who they sold my loan to. Heid and his cronies played cicle-the-wagon until I contacted my congressman. Finally was able to report this to Fannie Mae. While Fannie Mae hasn’t filed criminal fraud charges against WF, thank goodness they stepped in and have force WF’s hand. With a little luck things may finally get fixed. This process has taken 2 years to work itself out. Hopefully the end is in sight.

  5. Educated Commentor says:

    The eligibility criteria for this program are defined by US Treasury, not the banks. When you don’t qualify, it’s usually because you haven’t met the Treasury math. They have tresholds — target 31% debt-to-income after mod, for example, which yes, means that if you owe alot but now make very little (or are jobless), there’s little chance to qualify as you will never hit 31% DTI.
    In this case, hate the game, not the player.

  6. Chris B. says:

    It has taken a year for Wells to deny my modification. Each rep that you speak with, gives you a different answer. There is no one who is on the same page. They sent me my trial agreement back in June 2009 and I did not receive any other correspondence until this past April 2010. I’ve inquired each month to why I’m not getting notifcation letters and they all say the same thing…’you are going through a modification’…idiots. First they tell you you need to fall within the 31% guideline, then they tell you to decrease your expenses and increase your income. One rep told me rent a room in my house to increase my income….another idiot. I’m so sick of the crap that I’ve been dealing with and there is not reason this should have taken this long. I complied with what they wanted me to do. they told me to pay the modified amount until they came to a decision on my loan. I just found out three weeks ago that they jacked my original mtg amount back up on September. I have been paying the modified amount since June. I never received any indication and now I’m screwed on my credit, I owe a lot of money, fees and I need to lease a new car because my lease is up and I can’t because of Wells Fargo.

  7. jennifer s. says:

    OMG this is my situation in a giant nutshell with wells fargo I have been going thru the run around for over a year now being told different things by each person I have spoke to. I have been yelled at screamed at swore at by them. i have probally spoke to over a hundred different people in the 2 1/2 years we have had them as our lender. i once wrote a several page letter to wells fargo I faxed it mailed it and emailed it to every single wells fargo address i could find and never got a single response . i gave dates and names of people i spoke with and nobody ever helped me. we are now probaly about 9000+ in the hole to them and supposedly gonna get help soon? yah ok my negotiator has never NEVER called before but suddenly called 6 pm friday and said i have to have some documents into them within 48 hours . paystubs,another hardship letter,financial worksheet same thing ive sent 20 other times. there aint no way im getting them faxed to them by tommorrow at 6 . the last time i spoke with them they said i had until the 20th to provide this stuff well thats 8 days away and she told me if i dont have it there by monday am at the latest i am being taking off and wont have ANY sort of chance of a modification. they have point blank told me i am not able to get help with the hamp program i have done the calculations and we are well within guidelines. if i could do it over again i would NOT have got our loan thru them and if anybody ever asked me where to get help with a loan it would Not BE WITH them.. they have screwed out credit royaly. thanks for listening
    jennifer

  8. Talia says:

    JOIN People Against Hamp on Facebook!!!

    http://www.facebook.com/pages/People-Against-HAMP/121868194521157?ref=mf#!/pages/People-Against-HAMP/121868194521157?v=info&ref=mf

    These lenders (Wells Fargo in particular) are taking advantage of the HAMP program by deceiving customers. They literally lie throughout the entire process so that they can make money off of your foreclosure. The mass media needs to get on this! This is fraud and it is happening to thousands of people nationwide! They put you on a “three month trial” they tell you to if you continue making the modified payments and submitting your paperwork you will be approved for the mod and done. Throughout several months to even years they string you along telling you to just keep making your payments and we will get you on the mod. They did this to us for 10 months, constantly losing our paperwork. They tell you their will be no fee’s while you are on the program. What they fail to tell you or simply lie to you about as in our case is that after the 3 month trial period they put you back onto your original payment – while you are making modified payments that they tell you to make they are tacking fee’s and penalty after penalty. You find out (in our case $40,000 later) when you get the sudden foreclosure notice on your door that your loan has been penalized the whole time you were supposed to be on a modification. They then tell you you have been kicked off your modification and you have a few weeks to vacate your home, when it goes to auction. They auction your home at a fraction of the price owed and then are reimbursed for the remaining amount by the government. They then come after you for the back fee’s and penalties after everything you have gone through. They are taking advantage and making money off foreclosure’s, the more money they get out of the loan, the more money they make from the government. The gov. is encouraging and supporting this. This is pure, outright fraud by the people that are supposed to be protecting us! These lenders are pure criminal. Journalism excellence is the efforts that go towards helping the people, this is your job, to be the watch dog. This needs to stop!

  9. Roseanna Anderson says:

    I have been trying to get help for alomst 2 years,,,,Wellsfargo gave some trial period and made it sounds promising and then denied me a modification. Now I am behibd by one month whne I wasnt before,,,,they made me behind,,,,I cant make 2 payments I have been struggling making one,,,geesh! What the heck is that all about. It’s like they are trying to displace families.

  10. Kathy Styrcula says:

    Well it is October 18, 2010 and nothing has changed with Wells fargo’s loan modification program. It was good to here other people are experiancing the same pain and frustration. I started this process in May of 2009. I went to a special Making homes affordable Seminar where I got to sit face to face with a Wells Fargo person, a Freddie Mac person and Not for profit credit counselors, and things did change since March 9, 2010. Wells Fargo phone people must have been taught to be more compationite on the phone, but they still don’t know what is going on. They call repeatedly and ask for documents that they cannot verbalize exactly what it is they need. My 3rd go around, all payments have been met, all doc’s are in house, and in June I was told we qualified under Hamp so all should be a slam dunk wuth the final August 1 payment. Well I am still waiting for the slam dunk in mid October. I wish there was a savvy banker out there who could see there are people who can pay there mortgage at a reduced rate and maybe extended time and buy all our Mod’s, service us well and make money on this multi bank mess! Because now that we have been in this modification process we are shut out of the normal rhome refinance option. Is there a smart banker out there that can see the silver lining here?

  11. James says:

    Wells Fargo provided the loan for my home and now a soulless Investor is trying to take it away.

    I never missed an interest only payment for 55 until I fell on hard times. Now after dealing with Wells Fargo the past 23 months and getting denial after denial Wells Fargo FINALLY came up with a loan modification, kind of.

    After making 6 trial payments totaling $11,071.02, as requested by Wells Fargo, I was given a Loan Modification. Their idea of a loan modification is pay them $10,000 more and then just pay an extra $400 per month until the rate changes once again in 8 months. What? If I could afford $400 more per month I wouldn’t be in this situation in the first place. Now we have a sale date of 11/23/10. Up yours Wells Fargo.

    moc.oohaynull@99nlmj

  12. Cleveland says:

    I’m sick to death of WF. I’ve been trying since NOV 2008 to get a modification. I got approved for a special FHA loan where they covered 96% of the appraised value with a FHA fixed rate loan. The balance was then to be covered by a 40 year second with zero percent interest. I got approved; I got the papers to sign; I was about to go out and party, when I see they tacked on $20,000 extra (not fees, not points, not anything). I called Customer Service, and they told me it was a mistake and to send the paperwork back unsigned so the error could be corrected. WF set on the damn paperwork till the program expired and told me too bad…too sad…you don’t get the loan. Then, I tried to get the HAMP. I was coming off active duty and a large portion of my income was non-taxed. They are supposed to gross the non taxed portion up 125%, but they didn’t. I argued with them, I tried to explain, but the staff there are clueless. So the loss they showed me as taking was almost 1,000/mo less than it should have been; however, even without them doing it right, I still showed a loss in pay. In addition to meeting that qualifier along with all the others and my debt to income ratio being >31%, I was still denied. They stated even though I met all the requirements, my income was currently sufficient to make the current payment. My loan is one of those preditory loans with an adjustable rate, so right now I’m barely making the payment, but as soon as the rate adjust up, my income will no longer be sufficent to make the payment and my debt to income ratio will go up significantly. Anyway, when that happens, I still won’t be able to qualify because I won’t be able to show a loss in pay. It is ridiculous. NO ONE is holding the banks accountable. They are making up the rules as they go. If I don’t make a payment, they charge me a late fee and report me to the credit agency. When they screw up, absolutely NOTHING happens to them. The HAMP is a joke. Instead of just giving all that money to the banks with no one policing what the banks are doing, the govenment should have ear marked a set amount (say $100,000) to go to each person’s home loan and then made the banks refinance them all with zero fees to a 30% fixed w/ 5% interest. That would have bailed the banks and the people out. I know your thinking, “Wow, $100,000.” Well if you take the total amount of money they gave out to the banks and divide it by every person in the US 18 and over, the amount each of us could have gotten would have been higher than even that. I’m disgusted with the bank; I’m disjusted with out government; and I see no way out but at some point just having to walk away from my home. I’m tired of fighting with the bank to do what is right.

  13. Eloisa says:

    On Sep,17,2010 Wells Fargo foreclose our home, after more than a year fighting and them to get our home modify,at same point they approve us for a HAM but this payment was only $300 and more than 48% of our income I asked how they come up with this $ and that problem was that they enter the wrong income I told them that if they just look at the pay stub they would see the mistake and corrected but they told me that they don’t look at any documents that we sent to them,I requested to correct that income and sent me a new Approval base on the correct income they refuse to do it and I keep trying them they told me that I didn’t qualify them they sent a a letter telling me that they make a error but I do qualify for the program but at the end I was told that it was more than 12 moths and my investor can’t put more than 12 moths on the arrears at the end they foreclose on us on Sept,17,2010 with out sending us notification, I call on September,20 to follow up on my modification and that’s how I found out that we had lost our home,I had try to rescinded the sale, we offer to paid all the money that we were behind plus two moths in advance to show good faith but they don’t care they told us that no further review will be conducted,The problem is that they hire that they don’t know what are they doing and they have no training what so ever, if they made a mistake we paid for the consequences, in the first place it took more than 12 months because they don’t know what they were doing and them our investor don’t want to work with us because we are more than 12 moths behind, I’m paying them everything we own them to get our house back but they are no willing to do.

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