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Wells Fargo To Extend Its Loan Modification Programs to Wachovia/World Savings

January 27th, 2009
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With the Dec. 31, 2008 completion of the Wells Fargo / Wachovia merger, Wells Fargo has begun to aggressively use current streamlined approaches and new customized solutions to avoid preventable foreclosures for Wachovia mortgage customers. In total, 478,000 Wachovia customers – including those with Wachovia Pick-a-Payment loans – will have access to the program, primarily those whose loans are delinquent or are likely to become delinquent will be eligible for assistance. Given changing economic factors, the exact number of customers expected to be helped in this approximate $120 billion portfolio cannot be provided. Customers with loans being referred to foreclosure or that are in foreclosure will receive an extension until Feb. 28, 2009 to allow them time to contact and work with Wells Fargo on the new solution most appropriate for their circumstances. 

“As the ‘investor’ for these loans, we are rapidly designing programs to help these customers,” said Mike Heid, co-president of Wells Fargo Home Mortgage. “For those at-risk, we will offer combinations of term extensions of up to 40 years, interest rate reductions, charge no interest on a portion of the principal for some period of time and, in geographies with substantial property value declines, we will even use permanent principal reductions.”

Heid said the goal of any loan modification is to achieve sustainable and affordable mortgage payments generally targeting a 38 percent mortgage payment-to-income ratio. The company will continue to work case-by-case with all at-risk customers to understand their financial situations to determine if lower levels may be appropriate.

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