Wells Fargo settles deceptive loans claim; over 4,000 Florida borrowers will be eligible for loan modifications

Florida Attorney General Bill McCollum today announced a multi state agreement with Wells Fargo Bank over allegations of deceptive marketing practices of adjustable rate mortgage loans (POA’s) made by its subsidiaries, Wachovia Corporation and Golden West Corporation.

Under the settlement agreement, Wells Fargo has agreed to offer loan modifications to 8,700 borrowers in eight states, of which about 4,000 will be offered to Florida borrowers.  The plan to modify POA loans is scheduled to begin December 1, 2010 and run through June 2013.   Borrowers who are either 60 days delinquent or facing imminent default should consider contacting Wells Fargo or a experienced loan modification attorney to obtain mortgage relief.

Borrowers seeking modification will initially be reviewed under the federal Home Affordable Modification Program (HAMP).  For those who do not qualify for a modification under HAMP, Wells Fargo has agreed to use alternative assistance program to reduce the mortgage debt payments to less than 31 percent of the borrower’s income, which may include reductions of principal and interest rates.

The settlement agreement also makes a number of substantial servicing commitments for its POA borrowers which includes a 30 day timeframe for making modification determinations, establishment of a formal appeal process for borrowers who were previously denied a loan modification, and improved communication to allow borrowers to understand the entire loan modification process.

Wells Fargo will also be offering other foreclosure alternatives, including short sale, deed-in-lieu, and relocation assistance.

Any borrower seeking to take advantage of this opportunity modify their mortgage loan is advised to contact Rafael A. Gaitan.  Mr. Gaitan will conduct a financial analysis to determine the likelihood for qualifying for a loan modification, and will also be able to discuss other foreclosure alternatives.

Rafael A. Gaitan may be reached via e-mail at [email protected] or via telephone at 305.329.1462.

Please click here to view the Wells Fargo Settlement Agreement.