Arizona Judge Orders Wells Fargo to Testify on Loan Modification Practices
When it comes to obtaining a loan modification, Wells Fargoâ€™s reputation is a long way from being stellar.Â In fact, theyâ€™re one of the worst, according to several attorneys who have had significant experience working with the bank on behalf of clients over the past six months.Â So, when I read this past week that a woman in Phoenix had filed a complaint claiming that Wells Fargo had ignored her request for a modification, it was hardly news to me.
According to a story from KPHO.com, Channel 5 in Phoenix, the womanâ€™s name is Bobbi Giguere, and apparently she applied to Wells Fargo for a modification this past December after losing her job, and got nothing but lies, the run-a-round, and finally a foreclosure notice in return.Â The KPHO.com story quoted her as saying:
“I sent them everything they asked for, and then when I called to follow up they said, ‘What paperwork? What modification?Â We don’t know what you’re talking about,'” said Bobbi Giguere.
So, now a federal bankruptcy judge in Phoenix, Judge Randolph Haines, has ordered that a top Wells Fargo executive must come and testify about the bank’s loan modification policies.
Ms. Giguereâ€™s bankruptcy attorney was also quoted in the story as saying that itâ€™s â€śvery unusualâ€ť for a judge to issue such an order.Â “The judge is trying to send a message to Wells Fargo and other banks that they need to pay better attention to customers who want to modify their home loans,” Nussbaum told Phoenixâ€™s Channel 5.
Okay, so what?Â Big deal, right?Â Yet another story about a bank or servicer not doing what theyâ€™re supposed to do under the presidentâ€™s Making Home Affordable program.Â Well, hereâ€™s the rubâ€¦
Again, according to the KPHO.com story, Wells Fargo responded by issuing the following statement from Mary Coffin, the bank’s head of home mortgage servicing.Â It said:
“We appreciate the court giving us the opportunity to share our servicing practices, which include working with all customers facing hardships — even if they declare bankruptcy — until every reasonable option to prevent foreclosure has been exhausted.â€ť
The bank â€śappreciatesâ€ť the court providing the opportunity to â€śshareâ€ť servicing practices?Â Does anyone not see just how far from contrition we are here.Â We, and by â€śweâ€ť I mean anyone involved in obtaining loan modifications from servicers, all know whatâ€™s going on hereâ€¦ Wells Fargo is full of you know what.
They routinely deny having received paperwork, routinely refuse to comply with the rules of the presidentâ€™s program, and obviously arenâ€™t the slightest bit concerned that they be called to task for their widely known shortcomings that are putting people out of their homes and onto the street.Â Their practices are costing our president a great deal of credibility, and preventing our economy from even coming close to starting on a path to recovery.
CBS 5 News also reported that after running the story, many other homeowners contacted the station, â€śsharing remarkably similar frustrationsâ€ť.
According to the station:
â€śGetting the runaround about lost paperwork was amongst the most common complaint.Â The complaints came from customers using a variety of loan providers, including but not limited to Wells Fargo and Bank of America.â€ť
Channel 5 also quoted Arizona Attorney General Terry Goddard as giving banks and servicers â€śa D minusâ€ť when he was asked to grade them as related to helping homeowners obtain loan modifications.Â He went on to refer to the servicersâ€™ response to the presidentâ€™s program as â€śpatheticâ€ť.
Apparently, Channel 5 called Wells Fargo for a comment on the case and Ms. Coffin replied that the bankÂ â€ścould have offered better customer service and definitely could have communicated better.â€ťÂ Well, gee golly whizâ€¦ could they now?Â Is that all they could have done?
Listen, Iâ€™ve had enough with the sugarcoating that surrounds this issue.Â What the bank/servicer could have done is live up to its agreement to participate in the Making Home Affordable program.Â Wells Fargo took billions of dollars from taxpayers and they agreed to the terms of the presidentâ€™s program.Â They need to live up to that agreement and theyâ€™re notâ€¦ not even close.Â What was the percentage of Wells Fargo loans modified under the program that was reported last week in the administrationâ€™s â€śreport cardâ€ť?
Oh yeahâ€¦ 6%. And in response, Wells Fargoâ€™s Mike Heid, co-president of Wells Fargo’s mortgage unit issued the following statement:
“We know we’ve fallen short of our customer service goals in some cases.”
Theyâ€™ve got to be kidding.
According to Phoenixâ€™s Channel 5, â€śa Wells Fargo executive is scheduled to testify in federal court on September 3rd.Â The hearing was originally scheduled for this week, but the judge granted Wells Fargo an additional two weeks to research internal records and prepare their case.â€ť
Wells Fargo needed a little extra time?Â In my view, they should have been given the same amount of extra time theyâ€™ve too often given homeowners before theyâ€™ve foreclosed on their homesâ€¦ none.