DES MOINES, Iowa - December 20, 2010
Wells Fargo & Co. (NYSE: WFC) announced today that beginning Dec. 20, 2010 through June 30, 2013, at-risk Wachovia Pick-a-Payment customers in California may be eligible to earn principal forgiveness by making on-time mortgage payments. The company also will contribute $33 million to the state to enlist help in customer outreach, and to prevent or mitigate the impacts of foreclosures in California communities.
The program is the result of an assurance agreement between Wells Fargo and California Attorney General Jerry Brown related to the marketing and origination practices World Savings Bank (a subsidiary of Golden West Financial) and Wachovia used for pay option mortgages prior to Wachovia’s merger with Wells Fargo on Dec. 31, 2008. It is an extension of Wells Fargo’s ongoing efforts to assist at-risk Wachovia Pick-a-Payment customers with home payment relief, which began immediately following the merger.
These efforts have included modifications designed to make homeownership sustainable using combinations of interest rate reductions, term extensions, and principal forgiveness. The company also has hosted three large-scale Home Preservation Workshops in California in Los Angeles, Oakland and Ontario, and opened 15 Home Preservation Centers across the state to provide at-risk customers with the opportunity to meet face-to-face with a home preservation specialist.
“The majority of Wachovia’s Pick-a-Payment customers reside in California,” said Mike Heid, co-president of Wells Fargo Home Mortgage. “We’re pleased that going forward the attorney general’s office will assist with outreach, so that we can continue to work with as many customers as possible on the options available to them to prevent foreclosures.”
From January 2009 through November 2010, the company has extended significant home payment relief to more than 50,000 at-risk Wachovia Pick-a-Payment customers in California. The modifications have included some combination of interest rate reductions, term extensions, forgiveness on tax and insurances advances, and more than $2.9 billion in principal forgiveness. From Dec. 20, 2010 through June 30, 2013 – the period of the assurance agreement – the total amount of incremental relief for customers could be as much as $2.4 billion depending on the economy and individual borrower circumstances. This amount is consistent with the company’s prior expectations for loss mitigation in the California Pick-a-Payment portfolio, which was marked down in purchase accounting at the time of the Wachovia merger.
California joins 9 other states that have entered into similar agreements with Wells Fargo: Arizona, Colorado, Kansas, Florida, Illinois, Nevada, New Jersey, Texas and Washington.
The company will contact customers likely to be eligible for the new program via letters, and will maintain a dedicated helpline – including Spanish-speaking specialists – to assist borrowers. Homeowners who already have received a modification will not be eligible for the new program. Wells Fargo customers who originally took out pay option mortgages through Golden West or Wachovia who are looking for information about the loan modification program can call 888-565-1422.
This news release contains forward-looking statements about our future financial performance and business, including expectations for loss mitigation in our Pick-a-Payment portfolio. Forward-looking statements speak only as of the date made, and we do not undertake to update them. Actual results may vary materially from the expectations described in the news release. For a description of factors that could cause actual results to differ materially from expectations, please refer to our reports filed with the Securities and Exchange Commission available at www.sec.gov.
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 (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.2 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 10,000 banking stores, 12,000 ATMs, the Internet (wellsfargo.com and wachovia.com), and other distribution channels across North America and internationally. With more than 278,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked #19 on Fortune’s 2009 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.