Arizona Judge Orders Wells Fargo to Testify on Loan Modification Practices
Originally posted in August 2009.
When it comes to obtaining a loan modification, Wells Fargo‚Äôs reputation is a long way from being stellar.¬† In fact, they‚Äôre 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.¬† 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 woman‚Äôs 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.¬† The KPHO.com story quoted her as saying:
‚ÄúI sent them everything they asked for, and then when I called to follow up they said, ‚ÄėWhat paperwork? What modification?¬† We don‚Äôt know what you‚Äôre talking about,‚Äô‚ÄĚ 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‚Äôs loan modification policies.
Ms. Giguere‚Äôs bankruptcy attorney was also quoted in the story as saying that it‚Äôs ‚Äúvery unusual‚ÄĚ for a judge to issue such an order.¬† ‚ÄúThe 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,‚ÄĚ Nussbaum told Phoenix‚Äôs Channel 5.
Okay, so what?¬† Big deal, right?¬† Yet another story about a bank or servicer not doing what they‚Äôre supposed to do under the president‚Äôs Making Home Affordable program.¬† Well, here‚Äôs the rub‚Ä¶
Again, according to the KPHO.com story, Wells Fargo responded by issuing the following statement from Mary Coffin, the bank‚Äôs head of home mortgage servicing.¬† It said:
‚ÄúWe appreciate the court giving us the opportunity to share our servicing practices, which include working with all customers facing hardships ‚ÄĒ even if they declare bankruptcy ‚ÄĒ until every reasonable option to prevent foreclosure has been exhausted.‚ÄĚ
The bank ‚Äúappreciates‚ÄĚ the court providing the opportunity to ‚Äúshare‚ÄĚ servicing practices?¬† Does anyone not see just how far from contrition we are here.¬† We, and by ‚Äúwe‚ÄĚ I mean anyone involved in obtaining loan modifications from servicers, all know what‚Äôs going on here‚Ä¶ Wells Fargo is full of you know what.
They routinely deny having received paperwork, routinely refuse to comply with the rules of the president‚Äôs program, and obviously aren‚Äôt 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.¬† 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, ‚Äúsharing remarkably similar frustrations‚ÄĚ.
According to the station:
‚ÄúGetting the runaround about lost paperwork was amongst the most common complaint.¬† The complaints came from customers using a variety of loan providers, including but not limited to Wells Fargo and Bank of America.‚ÄĚ
Channel 5 also quoted Arizona Attorney General Terry Goddard as giving banks and servicers ‚Äúa D minus‚ÄĚ when he was asked to grade them as related to helping homeowners obtain loan modifications.¬† He went on to refer to the servicers‚Äô response to the president‚Äôs program as ‚Äúpathetic‚ÄĚ.
Apparently, Channel 5 called Wells Fargo for a comment on the case and Ms. Coffin replied that the bank¬†‚Äúcould have offered better customer service and definitely could have communicated better.‚ÄĚ¬† Well, gee golly whiz‚Ä¶ could they now?¬† Is that all they could have done?
Listen, I‚Äôve had enough with the sugarcoating that surrounds this issue.¬† What the bank/servicer could have done is live up to its agreement to participate in the Making Home Affordable program.¬† Wells Fargo took billions of dollars from taxpayers and they agreed to the terms of the president‚Äôs program.¬† They need to live up to that agreement and they‚Äôre not‚Ä¶ not even close.¬† What was the percentage of Wells Fargo loans modified under the program that was reported last week in the administration‚Äôs ‚Äúreport card‚ÄĚ?
Oh yeah‚Ä¶ 6%.¬†And in response, Wells Fargo‚Äôs Mike Heid, co-president of Wells Fargo‚Äôs mortgage unit issued the following statement:
‚ÄúWe know we‚Äôve fallen short of our customer service goals in some cases.‚ÄĚ
They‚Äôve got to be kidding.
According to Phoenix‚Äôs Channel 5, ‚Äúa Wells Fargo executive is scheduled to testify in federal court on September 3rd.¬† 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.‚ÄĚ
Wells Fargo needed a little extra time?¬† In my view, they should have been given the same amount of extra time they‚Äôve too often given homeowners before they‚Äôve foreclosed on their homes‚Ä¶ none.