Wells Fargo Surpasses Half Million Modification Mark and Continues to Expand Its Home Preservation Efforts

Company Initiated or Completed Three Modifications for Every One Foreclosure Sale on Owner-Occupied Properties

DES MOINES, Iowa - March 12, 2010

Wells Fargo & Co. (NYSE:WFC) said today that as of Feb. 28, the company had 505,832 active trial and completed modifications through its own modification programs and the federal Home Affordable Modification Program. More than 365,000 of those were non-HAMP active trials in place as of the end of February 2010 and modifications completed since the beginning of 2009. Wells Fargo had 139,065 HAMP active trial and completed modifications in place as of Feb. 28, including 24,975 permanent modifications and 7,533 permanent modifications pending completion.

Wells Fargo initiated or completed three modifications for every one foreclosure sale on owneroccupied properties from October 2009 through February 2010. Fewer than 2 percent of the loans secured by owner-occupied homes and serviced by the company proceeded to a foreclosure sale in the last 12 months. According to the March 5 edition of Inside Mortgage Finance, Wells Fargo’s delinquency and foreclosure rates in the fourth quarter of 2009 were three fourths that of the industry, and more than 91 percent of Wells Fargo’s mortgage customers remained current on their loan payments.

“Wells Fargo’s total modifications have surpassed half a million since the beginning of 2009, with one third of those through the government’s Home Affordable Modification Program,” said Mike Heid, copresident of Wells Fargo Home Mortgage. “HAMP is and will continue to be an important part of our efforts to keep people in their homes, but we are using every tool available to us to help prevent foreclosures whenever possible.”

Wells Fargo continues to start new HAMP trial modifications for customers and to step up its efforts to make final decisions on trials where customers have made all required payments. In addition to moving more customers into final modifications, a total of more than 19,000 Wells Fargo borrowers have been “canceled” (moved out of HAMP trial modifications without going to completion) out of the HAMP program because they don’t meet the prescribed guidelines. More than 11,000 of those cancelations occurred during the month of February. While the company expects to see cancelations increase in the coming months, Wells Fargo anticipates based on its experience so far that approximately 60 percent of those canceled will retain their homes through a non-HAMP modification or another workout option, 10 percent will pay off their loan in good standing or go to a short sale, and the remaining 30 percent will enter foreclosure or bankruptcy.

Wells Fargo indicated that of the HAMP trials that have been canceled to date, the top five reasons for cancelation were: inability to reach the target debt-to-income ratio under HAMP guidelines, negative net present value test, customer did not provide required HAMP documentation, pre-modification payment already below the program’s target 31 percent debt-to-income ratio, and customer not in danger of imminent default as defined in HAMP guidelines. These reasons accounted for more than 85 percent of Wells Fargo’s HAMP cancelations.

Based on its ongoing experience with Home Affordable Modifications, Wells Fargo continues to expect that modification outcomes for customers who have made all three HAMP trial modification payments will break out as outlined below:

Projected HAMP Outcomes
Borrowers who have made three HAMP trial payments as of 2/28/10 108,000
Completed modifications expected of those who have made three payments 50%
Not eligible for HAMP after documents have been reviewed 30%
Some required documents not provided 10%
No required documents provided 10%

Beginning March 1, ahead of the Treasury’s June 1 deadline, Wells Fargo began requiring income verification from customers before placing them into a trial Home Affordable Modification. Wells Fargo promoted this practice when HAMP first began and believes it gives servicers the information necessary to make better decisions for customers at the outset of the process. However, the transition will result in a slow down of new trial starts beginning in March as customers gather their required documentation. The company has added more than 9,000 home retention staff since the beginning of 2009 to manage the increased demand for modifications and other options and now has about 16,500 U.S.-based staff focused on home preservation efforts.

Wells Fargo also has expanded two face-to-face customer contact initiatives in order to reach more struggling borrowers. Five large-scale Home Preservation Workshops held to date have drawn approximately 7,000 customers and about half of the Wells Fargo Home Mortgage customers attending received modifications on the spot or within a short period after the event. Additional events are planned for Los Angeles; Oakland, Calif. and Miami in the first half of the year and other markets are under consideration for future workshops. In addition, the company has equipped 27 Home Preservation Centers in areas including California, Florida and Nevada to handle all types of Wells Fargo Home Mortgage customers. Borrowers who are invited to make an appointment at these centers, which were opened in 2009 to serve Wachovia Pick-a-Payment (negative amortizing and option adjustable rate mortgage) customers, can meet face-to-face with a local home preservation specialist.

About Wells Fargo
Wells Fargo Home Mortgage is the nation’s leading mortgage lender and services one of every six mortgage loans in the nation. A division of Wells Fargo Bank, N.A., it has a national presence in mortgage stores and banking stores, and also serves the home financing needs of customers nationwide through its call centers, Internet presence and third-party production channels.

Wells Fargo & Company is a diversified financial services company with $1.2 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,000 stores and 12,000 ATMs and the internet (wellsfargo.com) across North America and internationally.