In an effort to prevent foreclosures in communities across the country, ""Wells Fargo & Co."":https://www.wellsfargo.com/ said it is continuing to use the federal Home Affordable Modification Program (HAMP) and other modifications to provide customers with mortgage payment relief. As a result, over 400,000 Wells Fargo loan customers received assistance through active trial and completed modifications in 2009.[IMAGE]
As of December 31, 2009, the company reported 118,708 active trial and completed Home Affordable Modifications, including 8,424 completed modifications. Among the 118,708 HAMP modifications, Wells Fargo said approximately 74,000 borrowers had made all three trial payments by the year's end, and most of the borrowers who had not made three payments were not yet scheduled for their third payment.
Based on the company's experience with HAMP modifications, Wells Fargo has anticipated how its modification efforts will break out. Of the 74,000 borrowers who have made three HAMP trial payments as of December 31, 2009, completed modifications are expected for 50 percent, and 25 percent of these borrowers are anticipated to be ineligible for HAMP after documents have been reviewed. Wells Fargo estimates 15 percent of these borrowers will not provide some of the required documents, and the company expects all required documents to be missing for the remaining 10 percent.
Wells Fargo has continued its aggressive outreach efforts to establish Home Affordable Modifications for eligible customers and to gather the required HAMP documents from customers. Via telephone, mail, and other means, the company makes multiple attempts to contact borrowers who have provided only partial documentation, and Wells Fargo has tested door-to-door efforts to secure documents[COLUMN_BREAK]
from these customers. To manage the increase in home preservation efforts, the company increased its home retention staff by more than 8,000 in 2009, for a total of 15,000 staff based in the United States.
Approximately 350,000 non-HAMP modifications were also reported by Wells Fargo. Mark Heid, co-president of Wells Fargo Home Mortgage said HAMP is the first option the company considers when working with a customer who is experiencing a financial hardship. However, any customer who does not qualify for a Home Affordable Modification is also considered for Wells Fargo's own modification programs or other alternatives to foreclosure.
For every one foreclosure sale on owner-occupied properties in the fourth quarter of 2009, Wells Fargo initiated or completed three modifications using both HAMP and other payment-relief focused modification efforts. As difficult economic conditions persists for customers and their communities, the company said this emphasis on mortgage modifications reflects Wells Fargo's continuing commitment to purse all options to keep people in their homes.
""We continue to use every available tool to prevent foreclosures when a viable alternative exists, as that is in the best interest of our customers, our communities, and our shareholders,"" Heid said. ""Our objectives from the beginning have been to work to establish affordability for customers who are truly in need so that we can avoid foreclosures when possible. Our approach also considers the interests of the 92 percent of our customers who are current on their payments.""
According to Data published in the November 27 edition of Inside Mortgage Finance, 92 percent of Wells Fargo's customers remained current on their loans in the third quarter of 2009, and the company's delinquency and foreclosure rates were two-thirds that of large services as a whole and the industry in total. In addition, fewer than 2 percent of the loans secured by owner-occupied homes and serviced by Wells Fargo proceeded to a foreclosure sale in 2008 and 2009.
As economic conditions continue to change, new and different approaches are needed to effectively help borrowers avoid foreclosure. Since last summer, Wells Fargo has provided input to the Treasury Department on ways to improve HAMP, and the company also continually works to update its own modification programs and develop new workout options.