Under the terms of a Wells Fargo trial loan modification, borrowers must make all of their payments in order to qualify for permanent modification. In January of 2010, Mike Heid, Co-President of Wells Fargo Mortgage in San Francisco, admitted that 14% of borrowers who make one payment during their three month trial fail to make the remaining two, disqualifying them from permanent modification. Even though 14% is a relatively low number when discussing a rate of failure, it is a high number when discussing the rate of Wells Fargo loan modification failure. As soon as a borrower becomes a member of the 14%, they begin to understand how detrimental that number really is.
In January of 2010 it was also reported that a whopping 25% of borrowers granted temporary loan modifications under President Obama’s Home Affordable Modification Program had failed to keep up with their monthly payments, again making them ineligible for permanent modifications. This number should come as a surprise to many because under the terms of the trial modifications, the monthly payments of the borrowers were lowered. It is a harsh reality one must face when even their lowered monthly payments are not low enough to avoid foreclosure. It is a reality that hundreds of thousands of homeowners have been faced with.
For victims of a Wells Fargo loan modification failure, options may seem limited. If a borrower is unable to keep up with the lower monthly payments of a trial modification, perhaps other ways to avoid foreclosure should be investigated. Borrowers who can’t seem to keep up with their trial modification payments can look into bankruptcy, a short sale, deed in lieu of foreclosure, etc. Borrowers can contact their lender for more options. For those who feel that their Wells Fargo loan modification failure is no fault of their own, legal remedies may be available. If the reduction of a loan is so slight that it does not seem in proportion to the hardship presented to the lender for consideration, a borrower may be able to fight the failure by claiming that they were not given a fair chance to make their payments. In this case, a lawyer should be retained since the lender will most likely argue that everything they did was fair and proper. An attorney will also be able to argue on behalf of their client before a trial loan modification payment falls into default if the borrower feels that they will not be able to keep up with the new and temporary payment structure. There is nothing that says a borrower can’t ask for additional help if the help originally offered is not adequate enough to solve the borrower’s problems.
It is usually better, however, for borrowers to realize that their loan modifications were not made low enough while still in the trial phase because the monthly payments of a trial modification have a tendency to increase once the modification becomes permanent. Some borrowers have reported their permanent modifications as being just as difficult to maintain as their original loans.