Big Bank Loan Mod Approval Rate at Only 2.6%

By
Real Estate Broker/Owner with MBA Broker Consultants CalBRE Broker #00983670
https://activerain.com/droplet/MS4

In an article titled, "Wells Fargo not modifying mortgages as required, lawsuit says" the LA Times says, "Legal filings last week claimed Wells Fargo failed to provide wide-ranging reductions of loan balances to delinquent borrowers as it had promised two years ago when it settled a combined national class-action suit."

The lawsuit alledges that WFB granted only 2.6% of the loan modification requests.  Of the 66,000 requests for loan modifications made in the 18 months ending Sept. 30, Wells Fargo granted 1,746, or 2.6%, Berns alleged. 

These were primarily from the Pick-a-Payment loans from World Savings and Wachovia Bank which were both acquired by Wells Fargo bank.

Read full article here:  http://www.latimes.com/business/money/la-fi-mo-wells-suit-20121210,0,4840554.story

Posted by

Regina P. Brown
Broker, Realtor®, M.B.A., e-Pro, GREEN
California DRE # 00983670
www.CalCoastCountry.com

                

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Ambassador
1,551,195
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

Wells Fargo is my least favorite bank....in everything. They are slow and unyielding in many instances and the new loan process is just silly.

Dec 11, 2012 11:28 PM #1
Rainer
291,719
Ira Bodenstein
PNC Mortgage - Montclair, NJ
NMLS#: 445143

Very interesting.  Words can't explain this at all.  I am speechless.

Dec 11, 2012 11:59 PM #2
Ambassador
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Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Regina: I have to go read the article and should probably do so before taking a side. Although I adore short sales, I have always been troubled by the fact that people believe that the big banks MUST modify or short sale. If you owe me money and want to settle, I should not be forced to settle.  Or should I? It's something that I have considered in the past. That's why I always say, "When the banks say jump, we say 'how high?'" If the banks have agreed to debt settlement on certain logical terms, then by all means the borrower should try their best to accept the deal. ANyway... just food for thought.

Dec 12, 2012 12:09 AM #3
Rainer
163,354
Ryan Case
SCA Real Estate - Anaheim, CA
877-828-0710

I agree with Melissa. Banks shouldn't be forced into principal reducations, as they weren't the ones who signed for the original loan amount, it was the borrower. I have known several friends who have been underwater, and they simply either short sold, or let it go to foreclosure. The expectation that the banks should just forgive the debt and hand out principal reductions is one I am not for. I do think they should work on modifications with interest rates, lowering the payment of the borrower monthly.

Dec 12, 2012 12:17 AM #4
Rainmaker
609,730
Fred Sed
Fred Sed Group ~ Your Premier Southern California Realtors - Irvine, CA
Your Orange County Realtor, Why? Because Fred Sed

I knew the percentage of actual loan mods completed was bad, but I didn't think it was this bad! Thanks for sharing Regina.

Dec 12, 2012 12:33 AM #5
Rainmaker
1,578,870
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Hey, Wells agreed, didn't do what they said they would. Sue them again & keep bashing their heads with that judicial hammer.

Dec 12, 2012 12:35 AM #6
Rainer
215,328
Adam R. Cohn
STANDARD MORTGAGE CO. - Delray Beach, FL
We actually get mortgages closed FAST!

Its crazy how low the approval rate is, they deny people all the time when they need it most.

Dec 12, 2012 12:52 AM #7
Rainmaker
797,790
Nancy Frimann
Eagle Ridge Realty/Signature Homes & Estates - Gilroy, CA

Very interesing.  Those loans proved to be toxic, for many, although my current interest rate on my World loand is about 3%, which is sweet!  I hope it stays at the rate for a while.

Dec 12, 2012 02:30 AM #8
Rainer
194,597
Stephanie Stringer
First Choice Loan Services NMLS#210764 - San Antonio, TX
Mortgage Loan Originator

This does not suprise me one bit.   I knew the numbers were low with all loan mods across the board.

Dec 12, 2012 03:19 AM #9
Rainmaker
1,317,651
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Hmmm this does not sound good.  I would think that those who are supposed to be enforcing the judgment would be concerned.

Dec 12, 2012 04:30 AM #10
Rainmaker
256,460
Susan Jackson
America's Network Realty Group, Inc - Sandy Springs, GA

Why am I not surprised.  I think across the board generally the percentage of loan modification approvals is low.

Dec 12, 2012 06:13 AM #11
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Wells Fargo has said to be a problem about this and very hard to deal with on the short sale side of things too.

Dec 12, 2012 06:21 AM #12
Rainmaker
490,543
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

I have worked with Chase, and I must say they surprise me when a client of mine was at an impasse Chase came through. As to Wells Fargo not everyone plays by the rules. Interesting comments.

Dec 12, 2012 09:24 AM #13
Rainmaker
525,252
Regina P. Brown
MBA Broker Consultants - Carlsbad, CA
M.B.A., Broker, Instructor
Thank you my AR friends for stopping by and commenting on this post. It's true that the banks are not legally required to complete loan mods; but if you're taking tax-payer money from the government with the understanding of doing loan mods, then you need to complete them. This whole situation just brings light to the lack of accountability: no accountability for the big banks, no accountability for the government, and no accountability for borrowers....
Dec 12, 2012 10:15 AM #14
Rainmaker
810,127
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA

Regina:

I agree the numbers don't look good for Wells Fargo, but I should read the entire article before I comment.

Dec 13, 2012 05:03 AM #15
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Regina P. Brown

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