Does Wells Fargo usually deny loan modification?

Hi erin,

Loan modification will help you in saving your property if you are on the verge of a foreclosure. The value of the property will not be lowered in this case. However, the lender may reduce the interest rate and increase the term of your loan payment. You should also remember that in this process, the lender may add up the past due payments while giving you the alternative payment plan. This can increase your monthly payments.

Take Care.

erin, modification of a loan has no impact on the value of your home. value is determined only by what a reasonable person would pay if that person were to purchase the home. lenders have no input concerning value.

Can I apply for a loan modification based on the fact that my house value now is 30000 lower than when i bought it ??

Not if you can still make the payments. Why should the bank lose $30k? You are the one who made the investment decision.

that'll probably be looked at as a little bit harsh, eric. i know what you mean, though. using a declining value as a rationale for seeking a modification is slipshod to me, too. i understand loss of job, illness, and myriad other things that factor into someone's difficulties in making payments, but i find it hard to believe that a drop in value will hamper someone's ability to pay. wait...not hard to believe, but impossible.

I am current on my loan which will adj in a few years. Business is down so I'm concerned and wanted to change the loan to a 30 year fixed but keep the amount and the payments. Wouldn't the lender welcome that and would it be classified as a loan modification. I don't want to pay for an apparisel and costs. Thank you

hi berta,

as far as i can understand from your post, you want to refinance the your arm into a 30 year mortgage. in order to refinance the mortgage, the lender will look into your credit report and your income. apart from that, the lender will also check whether you have equity in the property. once you refinance, the payments may decrease as the interest rates are quite low these days.

this will not be considered as a loan modification. loan is modified only when you are delinquent on your payments.

thanks

berta, your lender isn't going to modify your loan, at least based on what you've stated.

as james noted, you're looking at a refinance in order to do what you propose.

Since we bought the home in 2007 it has dropped 30% so we do not have any equity to do a re-fin. Is there any talk of lenders addressing people who are going to end up with a problem once their loans adjust but are still current on their payment? It's sad to think that the only way to hold on to your property is to default on your payments, just seems wrong to me. Any advise would be appreciated. Thanks

I would suggest you to contact you lender once and check out if he can offer you a loan modification. You'll have to explain your situation in details to the lender by writing a hardship letter. But again, it is a fact that most lenders will not offer you a loan modification until you default your payments.

agreed...as adonis noted, the only way to determine if they'll grant a modification is to ask.

I think that there is still chance that the house won't be foreclosed. I read in almost all guidelines concerning this crisis that lenders should look at all options before foreclosure. If they started the modification process they have to be denied and all their attempts to get the modification turned down before they actually foreclose. That's at least how i got it...

I really don't know how this got here :) I was answering to another post... But anyway... There goes my opinion...

Hi srleee

Do your remember the title of the post?

Thanks.

Hi,
I contacted WF in December when my husband received a notice from his employer that his salary would be reduced beginning Jan. 2009. WF said they'd send me a modification packet in the mail, after waiting a month, I called to follow-up, and was told to fax a hardship letter with supporting documentation; so I immediately faxed everything as requested. I called at least twice a month to follow-up and found out a processor was assigned by late March. Since then like clockwork I call, every two weeks and check the status. (They will not let you speak to the processor assigned!). Just today, I am told, when I called to follow-up, that our modification has been denied due to our monthly debit far exceeding our monthly income; but the figures they were giving me were not correct nor what I had faxed them. It ends up that they misunderstood our American Express balance on the credit report as a monthly obligation since it does not show a payment option like most credit cards. Also, this card is used for my husbands business travels, so while the balance is high, it is fully reimbursed through his company. I called WF back to explain and they said I need to send it all over again and start the process from the start!!!!! I'm floored! Once again, I faxed them an updated letter, explained the misunderstanding with supporting documentation showing the payment option and a pay stub from an expense check for my husbands business travels and pretty much begged for them to look at this quickly.
We are not late on our payments, we have been treading water for the past few months getting further in debt with credit cards and wiping out our entire savings. We were hopeful that the Homeowners Affordability and Stability plan would help us, but we can't wait another four months.
I'm furious that Wells Fargo didn't even bother to call us before making the decision to question the credit report and give us an opportunity to explain. I don't know what to do to expedite this very long process!!! :cry: