28 Oct 10 Wells Fargo Home Mortgage Amending Foreclosure Policy
Wells Fargo announced yesterday that the mortgage lending giant will re-file documents on 55,000 mortgage foreclosures, drawing immediate fire from one of the state attorneys general most critical of banks in the continuing home foreclosure crisis. With many homeowners stuck with underwater mortgage loans, Wells Fargo continues to confront challenges for home mortgage refinancing programs.
Attorneys general in all 50 U.S. states are investigating whether home loan lenders rushed through the home foreclosure process and evicted American homeowners from their houses without properly verifying documentations. Lawsuits have already begun to trickle in and banks may also face fines or be forced to repurchase defaulting home mortgages Wells Fargo found problems with mortgage foreclosure affidavits in 23 U.S. states where the final internal review or the notarization of the documents did not meet company standard. The bank plans to re-file the affidavits by mid-November.
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A spokesman for the bank said that their home loan division will keep the mortgage refinance guidelines in check so the loan default rate will be reduced in the years to come. |
08 Jul 10 Nationwide Mortgage on the Irony of Wells Fargo Woes
The Nationwide Mortgage Blog posted a fascinating article on the Wells Fargo that connected the dots between company mergers, loan default increases and recent mortgage industry layoffs. The author, Bryan Dornan wrote an article for Nationwide that underlined the ironic nature of Wells Fargo buying an Option ARM lender after the company would not budge on originating risky loans even in the “hey-day” of the “everyone with a heart beat is approved” lending era. He notes how interesting it is that a conservative lender like Wells fargo who never took risks with loan programs like the negative amortization, No Income No Asset mortgages, zero down stated income purchase and 125 loans would go out on such a limb financially to buy a toxic asset like Wachovia.
“In 2006 the subprime mortgage crisis exploded when home loan lenders started going out of business as loan defaults started mounting.” Home values started plummeting nationally and in 2007 the economy took a turn for the worst. In 2008 employment skyrocketed and mortgage giants like WAMU and Wachovia were on the verge of bankruptcy. The government stepped in and brokered Chase to take-over WAMU and Wells Fargo to take-over Wachovia.
Don’t you find it interesting that after years of refusing to originate the risky option ARM product that Well Fargo went out and bought, Wachovia who just failed because they bought the biggest option ARM lender, World Savings? I find it strange that after nearly escaping the mortgage industry debacle because of their wavering from their conservative lending philosophy that Wells Fargo would make this kind of catastrophic investment. Did they ever think to do a back-ground check on this billion dollar bank they were buying? This is sad because 4,000 people would still have their job today at Wells if it were not for this impulsive and uncharacteristic transaction. Maybe they should take a page from Obama and blame their mistake on Bush. Regardless of this giant financial blunder, Wells Fargo is still a great company that will survive the series of crisis’s and continue to be America’s most trusted mortgage lender. Read the original Nationwide article > How Wells Fargo Layoffs Will Affect the Mortgage Loan Industry.
08 Jul 10 Wells Fargo Announces Nearly 4000 Layoffs in Consumer Finance Unit
Wells Fargo Announced Thursday that it would no longer originate subprime home loans and were closing their finance division that specialized in those higher risked loans. According to Reuters Wells Fargo was poised to close their consumer finance division that was established a hundred years ago. Even though Wells Fargo has a reputation as a prime mortgage lender that had conservative lending guidelines they had been struggling with delinquencies and loan defaults from their own bad credit home mortgages in addition to mortgage portfolios it acquired from Wachovia Corporation when they recently took them over.
Wells Fargo announced they were closing 638 Wells Fargo Financial offices, which increased its number of retail branches to 6,600 after the Wachovia merger. The bank also has 2,200 Wells Fargo Home Mortgage offices and will eliminate about 2,800 employees from its Wells Fargo Financial unit and will most likely slash another 1,000 jobs in the next year.
According to Dave Kvamme, chief executive of Wells Fargo Financial in Des Moines, “The nonprime real estate business had really declined dramatically over the last 12 to 18 months.” He believed that that Wells waited too long to convert their loan officers from originating subprime loans to FHA mortgage loans too late. As the non-prime home loans contributed to the increased loan defaults that put the company in a position of risk they no longer were comfortable with. Kvamme continued, “The bank has switched from offering subprime mortgages to offering FHA home loans guaranteed by the government.”
Tags: bad credit home mortgages subprime home loans, Consumer Finance Unit, Wachovia Corporation, Wells Fargo, Wells Fargo Home Mortgage
