Discouraged home owners caught in the exorbitant cost of adjustable rate mortgage loans, have an option of escaping with a Wachovia loan modification. Wells Fargo Bank has recently acquired Wachovia, which may allow that 'escape' to have a bigger opening for homeowners to use before defaulting on their mortgage loans. Before the take over, Wachovia had already put a beneficial loan program in place to permit struggling clients to continue to live in their homes and to pay at a rate that increased more gradually, allowing foreclosure to be avoided.
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The program looked promising, but unfortunately during the acquisition Wells Fargo apparently had their own ideas on how Wachovia loans were to be handled. Borrowers were informed that the previous program was no longer available and that there were not any other plans in place to modify existing Wachovia Pay Option ARM loans. Homeowners were given short term solutions of payment deferral or repayment plans, and these are not options that will help borrowers in the long term.
In the midst of the shareholders finalizing the bye-out more aggressive options for borrowers have been put in place and are available. The basis for this is the fact that the majority of defaults are on the Pay Option ARMs from Wachovia loans. Forecasts of increasing unemployment rates and even more home foreclosures are painting a very dim picture of the future for a 12.7 billion dollar purchase by Wells Fargo.
With a portfolio that will produce a $60 billion dollar loss, the Wells Fargo debt of $482.4 billion isn't going to get any better. Since their 60% of projected losses are caused by Pay Option ARMs, a more aggressive, effective program will have to be put in place. Motivation for a modification plan better than the original Wachovia loan change program is high. Previous borrowers that thought foreclosure was inevitable may find that they do have a chance to get into a Wachovia or Wells Fargo loan modification program and keep their homes.
Potential homeowners that will want to take advantage of a Wachovia loan modification will have to be patient and make sure all their documents are prepared for when they do contact their lender. Careful judgment has to be made by Wells Fargo to straighten out the chaos this buy-out has left them. Borrowers have to learn about the Wachovia loan modification programs in place.
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