Wells Fargo Responds

The Save the American Dream campaign is not asking for a 2-year moratorium on ARM resets so homeowners can use that time to eat bonbons, twiddle their thumbs and do nothing about their situation.  The point of the moratorium is to provide immediate relief for homeowners NOW so they can work with their servicers towards a long-term affordability plan.  We feel during this moratorium, homeowners should seek housing counseling and be in communication with their servicer.

Our neighborhoods are being destroyed, homeowners can’t get through the automated voice message systems that so many of the mortgage companies have set up to assist borrowers, families are being displaced unnecessarily and the government and industry are taking their time in providing help to families facing foreclosure.  These are desperate times and we need the industry to respond with something more than wristbands and 800 numbers.   Wells Fargo and Countrywide, as the two largest originators and servicers, need to take the lead in implementing this moratorium.    

It’s a moratorium on ARM resets.  It’s not like we’re asking for a moratorium on making mortgage payments.      

AMERICAN BANKER PIPELINE - October 4, 2007
The moratoriums some consumer groups are advocating on mortgage interest rate adjustments are not all they are cracked up to be, according to Wells Fargo. Moratoriums may appear to offer relief for consumers in the short term, but actually can hurt borrowers [in the] long term,” Kevin Waetke, a spokesman for Wells, wrote in an e-mail Monday. “At the end of a moratorium, a significant event would need to occur to enable the customer to get caught up.” Last week the National Training and Information Center, a Chicago advocacy group, said that Wells and Countrywide Financial Corp. played a critical role in the rise of foreclosures,” and that it has asked both lenders to adopt a two-year moratorium on resets for the adjustable-rate mortgages that are scheduled to begin resetting this month. Mr. Waetke wrote that Wells’ foreclosure rates are below average, and that the San Francisco company has “expanded our efforts” to help borrowers. “We proactively contact customers with impending ARM resets, offer a toll-free number, … and typically work with customers up to the actual point of foreclosure to help them prevent it.”Wells also has “worked with industry stakeholders to enhance the options available to consumers facing financial difficulty with due regard to investor interests,” he wrote. The company was involved in an industry effort this year to get clarification on whether accounting rules prohibit servicers from modifying securitized loans.