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Wells Fargo Expands Mortgage Modification Program

Associated Press

Wells Fargo & Co. said Monday it extended its mortgage modification program to customers of Wachovia Corp., which it purchased Dec. 31.

Wells Fargo said 478,000 Wachovia customers, with loans totaling about $120 billion, will have access to the program, though San Francisco-based Wells Fargo said it was unsure how many customers would take part.

The customers within this portfolio that are being referred to foreclosure or are in foreclosure will receive an extension until Feb. 28 so they can apply for the modification program.

The loan modification program is aimed at helping customers avoid foreclosure and remain in their homes as mortgage defaults continue to rise. Wells Fargo provides various modifications with the goal of reducing mortgage payments to about 38 percent of the size of a customer's income.

The modifications can include extending loan terms to 40 years, reducing interest rates, charging no interest on a portion of the principal for a set period of time or even permanently reducing the principal of loans in areas where housing prices have significantly declined.

Wells Fargo purchased Wachovia last year amid the mushrooming credit crisis. Charlotte, N.C.-based Wachovia was hit especially hard by rising mortgage defaults as the housing market has been mired in a two-year slump.

The company has increased the number of full-time default and home-retention workers by 125 percent at its West Des Moines office over the past two years. The company's home mortgage division now employs about 30,000 people. Of those, 6,000 deal with defaults and home retention.

The company says it will continue to increase the number of those workers as demand warrants.

Wells Fargo services $1.5 trillion in mortgages.