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Wells Fargo Surpasses Half Million Modification Mark

As of February 28, 2010, ""Wells Fargo & Co."":https://www.wellsfargo.com/ had 505,832 active trial and completed modifications through its own modification programs and the federal Home Affordable Modification Program (HAMP).

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The company said it initiated or completed three modifications for every one foreclosure sale on owner-occupied properties from October 2009 through February 2010, using both HAMP and non-HAMP modifications efforts. More than 365,000 of its modifications were non-HAMP active trials in place at the end of February and modifications completed since the beginning of 2009.

The servicer also had 139,065 HAMP active trial and completed modifications in place by February's month end, including 24,975 permanent modifications and 7,533 permanent modifications pending completion. According to the administration's February HAMP report card released Friday, Wells Fargo completed more permanent modifications than any other HAMP servicer.

""HAMP is and will continue to be an important part of our efforts to keep people in their homes, but we are using every tool available to us to help prevent foreclosures whenever possible,"" said Mike Heid, copresident of Wells Fargo Home Mortgage.

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Wells Fargo said 108,000 of its HAMP borrowers had made all three trial payments as of February 28, 2010. Of these, a completed modification is expected for 50 percent, and 30 percent will likely be ineligible for a permanent modification after documents have been reviewed. Wells Fargo anticipates another 10 percent will be missing some of the required documents, and the remaining 10 percent will fail to provide any required documents.

In addition to moving more customers into final modifications, more than 19,000 Wells Fargo borrowers have been ""canceled"" out of HAMP--meaning they were moved out of HAMP trial modifications without going to completion because they don't meet the prescribed guidelines. More than 11,000 of these cancelations occurred during the month of February, and the company expects to see cancelations increase in the coming months.

Based on its experience so far, Wells Fargo believes approximately 60 percent of those canceled will retain their homes through a non-HAMP modification or another workout option, and 10 percent will pay off their loan in good standing or go to a short sale. The remaining 30 percent will likely enter foreclosure or bankruptcy, the servicer said.

Beginning March 1, ahead of Treasury's June 1 deadline, Wells Fargo began requiring income verification from customers before placing them into a trial HAMP modification. This gives the company the information necessary to make better decisions for customers at the outset of the process; however, the transition will result in a slowdown of new trial starts beginning this month.

To manage the increased demand for modifications and other options, Wells Fargo has added more than 9,000 home retention staff since the beginning of 2009. The servicer now has approximately 16,500 U.S.-based staff focused on home preservation efforts.

About Author: Brittany Dunn

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