Modifications A la Carte!

Wells Fargo Modifies Nearly a Quarter-Million Mortgages
08/26/2009 By: Carrie Bay
Wells Fargo says that through the first seven months of this year, it modified more than 240,000 mortgage loans, including 20,219 trial modification starts under the federal Home Affordable Modification Program (HAMP).The lender’s mortgage unit, headquartered in Des Moines, Iowa, recently came under fire when the Treasury disclosed earlier this month that Wells had started trial modifications on only 6 percent of its HAMP-eligible mortgages, one of the slowest starts among large lenders.
Wells Fargo Home Mortgage currently services one of every six mortgage loans in the nation. The company says that more than 90 percent of its customers have remained current on their mortgage payments, and it boasts the lowest delinquency rate of the top four lenders in the nation.
Mike Heid, co-president of Wells Fargo Home Mortgage, said his company has been accelerating its use of HAMP. “We’re confident we can achieve our portion of the government’s goal to reach 500,000 HAMP trial modification starts by November 1,” Heid said.
To assist the mounting numbers of distressed homeowners, Wells Fargo hired and trained 4,000 new employees in the first half of the year, adding to the 7,500 staff already in place. The company also says that it plans to quickly eliminate the customer service backlog created by the time lag between when the government announced HAMP and when the guidelines were defined.
“While the majority of our customers who request help are getting through to us and receiving the help they need, we know we’ve fallen short of our customer service goals in some cases,” Heid said.
Heid went on the explain, “We’ve recently undertaken new steps that will soon enable us to qualify most borrowers for a HAMP trial modification during our initial point of contact, and then send eligible customers the required trial modification agreement within 48 hours. During the three-month trial period, we’ll work with the customer to collect all of the required items to determine if the modification can be finalized.”
In addition to lowering payments through modifications, for the first seven months of 2009, Wells Fargo also completed more than 860,000 refinances for Americans.

Let the cycle begin again!!! Aleluya!

With the passing of each week it becomes increasingly difficult to argue that housing isn't in full-recovery mode. This week's data makes it nearly impossible, considering that sales of new homes spiked 9.6%, in July, to an annual pace of 433,000 units. The “experts” had expected sales to post at only 390,000 units. The increase was the largest since February 2005, helping to force the inventory of new homes down to a 7.5-month supply, the lowest in 16 years.
Even more encouraging, the most recalcitrant housing bear is starting to turn bullish. Robert Shiller, co-creator of the S&P/Case-Shiller home-price index, told Bloomberg that “we might be seeing a turnaround.” Understated, to be sure, but that's Shiller's style. As for his index, 18 of the 20 cities tracked showed improvement in June, up from eight in May, four in April, and only one in March.
Detractors will counter that the recovery is concentrated in lower-priced homes. True, but that's changing as well. Toll Brothers, a luxury homebuilder, stated that declining cancellations and firming prices has allowed the company to reduce incentives and raise prices in selected communities. To quote Toll Brothers Chairman and CEO Robert Toll, "We believe that customers are recognizing that now is the time to get into the market to take advantage of near-record affordability in what is still, for now, a buyer's market."
More optimism can be gleaned from the fact that housing isn't the only big-ticket sector showing signs of recovery. Orders for durable goods – those meant to last several years – jumped 4.9% in July, posting the biggest increase in two years. Yes, the “cash-for-clunkers” program was a contributing factor, but even without this incentive, other durable goods orders moved ahead 0.8%.
The gross domestic product numbers also suggest that all, if not well, is getting better. On that front, the government says the economy shrank at an annual rate of 1% in the second quarter, a better-than-expected showing. The drop, while representing a record fourth consecutive decline, was far smaller than the previous two quarters. It also was stronger than the 1.4% decline that many economists had expected.
Finally, mortgage rates continue to hold steady, a sign that inflation remains a non-issue. The 30-year fixed-rate loan continues to hold at 5.5% while the 15-year fixed-rate and five-year adjustable-rate loans continue to hold at around 4.9%. Today's housing market remains a buyer's market, with low prices and low borrowing rates, but keep in mind Mr. Toll's quote, “for now.”