Wells Fargo Offers Pick-a-Payment Customers a Reprieve

 Wells Fargo Offers Pick-a-Payment Customers a Reprieve

Wells Fargo & Co. announced this week that from December 18, 2010, through June 30, 2013, Wachovia Pick-a-Payment customers who are at-risk of default may be eligible to earn principal forgiveness by making on-time mortgage payments.

The company has made an agreement with attorneys general in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas, and Washington.

Under the agreement Wells Fargo will also contribute $24 million to the states to help with customer outreach and to help prevent or alleviate the impact of foreclosure in those communities.

Wells Fargo developed this program due to concerns expressed by the attorneys general about the Pick-a-Payment loans and how they were originally marketed to customers by Worlds Savings Bank and Wachovia, who merged with Wells Fargo in 2008. Wells Fargo has already provided at-risk Pick-a-Payment customers nearly $3.4 billion in principal forgiveness.

"In light of the unprecedented changes in our economy, Wells Fargo will continue to work with leaders across the nation on steps to help stabilize communities," said Mike Heid, co-president of Wells Fargo Home Mortgage, in a press release.

The Des Moines, Iowa-based company plans to send letters to customers eligible for the new program by December 18. It will provide a helpline with both Spanish and English speaking specialists to assist borrowers.

Borrowers who have already received a modification will not be eligible for this new program.

by Joy Leopold, DSNews.com