Wells Fargo Denial
Hi Chris. We received a denial letter from Wells Fargo last week and right now our house is scheduled for a February 4th sale.
But the reason given in the form denial letter references a monthly expense number that we have never turned in. In reviewing my phone records, it looks like they have not been paying attention to any of my expense revisions that I have turned in the last few weeks.
A few weeks ago, they started including a “medical expense” of $566.25 in our budget and we have no idea where it came from. I requested, in writing on 12/21 to know where this came from and they never responded.
We have had several significant reductions to our expenses that I faxed them back in December, and they did not include those revisons in their decision either.
In my most recent letter to them, I requested several specifics including 1: a copy of the worksheet used to deny our request, 2: a list of the loan modifications they have considered us for (internal, HAMP, etc.), 3: An explanation of why our loan was not modified for specific “waterfall” examples we know should work for us (ie a reduction to 2.25% at 30 years,) and finally 4: the name of the investors on our loan.
On the blog, you referenced a Fannie Mae guidline that requires lenders to give homeowners the numbers used in a denial decison and give them 30 days to review those numbers for accuracy. I read the document, but it was not clear if it would apply to Wells Fargo. Especially if they have never officially considered us for HAMP, but rather just their internal modifications.
I had one rep tell me yesterday that once they input our worksheets into the system, they just get shredded. So how can they review everything for accuracy?
Because their last decision was based on incorrect information, we think we have a pretty good shot at having them delay our sale date and put us back into active review again. But they want me to fax everything into them again before they make that decision. We feel that because they clearly made some errors, they should delay the sale anyway, but we will do what they ask.
Right now, we are submitting everything again on our own. We have considered using a HUD approved counselor to help, but I actually had one in Rancho look at the packet we submitted and tell me I was doing everyting she would have done. Maybe there are better ones, I know you like Jesse in Riverside.
Since the sale date is so close, we are also considering NACA, but I don’t know what success they have had with Wells Fargo.
My questions are, with the sale date so close, what do you recommend as our best course of action? Does Wells Fargo have to respond to our questions and what do we do if they don’t? Should they be giving us 30 days to review their numbers, or does that not apply to them?
Thank You Chris
The market will not bounce back in six months. In my humble opinion. Goldman Sachs forecast reports match the Center For Repsonsible Lending’s, that demonstrate 13 to 14 million more foreclosure over the next three to four years.
Fight to keep your home because you love it, not because you believe you can rationalize it financially.
@BeaumontBill
A whole lot of the IE already has walked away. But today a short sale is a much more attractive solution for struggling home owners. You can’t worry about the 20% down payment, that is gone, forget about it. My 401K is still worth 30% less than it was 3 years ago. I can’t worry about that it’s gone. I can only worry about today and the future (which is why I just put my 401k in fixed bonds).
Run the numbers for your situation but not just looking at today. Go out 5 or 10 years. And consider if you might want to move in that period. Lets say your home cost $400k you put 20% down so you owe 320k (assuming you did not take some goofy ALT-A loan). Your home is now worth $200k and will probably be worth $200k in 5 years (This is the tricky bit, you don’t know what it will be worth in 5 or 10 years. But based on the current policies and past real estate crashes it’s highly likely we will have 5 to 10 years of no significant price movement). You could probably buy your home again in a few years once you credit is repaired for $200k. Or if you get a mod, you will be trapped in a home still worth far less than you owe (after 5 years you still own about $280k). You can’t move, you can’t sell.
I am not saying walk away. I’m saying look at all your options and don’t take a narrow short term look. Consider 5 or 10 years down the road. If you think the prices are going to recover then ignore this advice. Many of the younger buyers still think prices are coming back. Just like many gold buyers thought $1000 an ounce gold was coming back in 1979. That took 30 years to happen and the real estate price of 2006 will probably take just as long.
@Jason
Given that line of thinking, the whole Inland Empire should walk away from their homes. Our whole neighborhood has been reassessed for less than half what we all paid originally.
Yes, we are pushing to save our house for emotional reasons, but I put 20% down and a year later had 30% equity before all this happened. We are facing a short term hardship, that we should have completely turned around in the next 6 months. It’s tough just to let the bank have the house after all that hard work because of a temporary set-back.
I do have neighbors that have recieved 2% and 2.5% modifications and they are in much worse financial shape than we are. It almost seems like you have to be lucky enough to catch a rep on the phone that is in a good mood that day.
That is why I would really like to know the answers to the questions I have posted. What can we do if the bank refuses to answer our basic questions like “who is the investor that owns our loan?” Does Wells Fargo have to provide the numbers they used to reject us and give us 30 days to review them as Chris mentioned in an earlier post? Is it right/legal for the trustee to make themselves completely unavailable so you can not get important information from them?
Thanks,
Bill
@Chris
Emotional value is nice as is family stability but it must be weighed against their financial futures. I see so many families throwing away their future for a short term fix. In my business I just run the numbers and try to remain emotionally neutral. I feel terrible for most of my clients that are going through this. But when I run the numbers it’s rare to find a family that would be better off in 5 years staying in their underwater home. If they are $50k or even $100k upside down (with higher incomes) then it might make sense to look for a solution to stay in the home. But 90% of the people that I see are $200k to $500k underwater.
I totally agree with you. I think we are looking at a decade or more before the housing market recovers. And I don’t mean recovers to 2006 prices. I mean recovers to normal appreciation. I don’t think we will see those silly 2006 prices for 20 or 30 years.
@Jason
Jason, I laughed at your response, but I agree.
People need to fight to keep their home because it has emotonal value to them, not for financial reasons. It took from 1991 to 1998 for the market to heat back up from a small recession, this is a ten to twelve year recovery.
I’ve never seen or heard of anyone get a 2.5% 30 year mod. The better mods I am seeing are 3.5% to 4.5% for 5 to 10 years then adjusting. But even those are few and far between. Most of the mods I am seeing are the extend and pretend variety. Those really do not offer the homeowner any real help other than saving them from having to move. In fact they will probably be far worse off in a few years than they would be if they let the house go. The only way they can come out ahead is if the values rocket back up. And that’s about as likely as me becoming the king of England. They are not going to offer 2% or 3% 30 yr loans. If they did every borrower in America would stop making payments to get one.
Thanks Chris,
My loan is not with Fannie or Freddie. As for my other questions, what can we do if Wells Fargo does not respond to our questions? Right now I don’t know who owns my loan because they will not tell me.
And do they have to give us 30 days to review the numbers they used to reject us.
An interesting side note, the website and phone numbers for the trustee have not been working for the past 5 days, so I can not check to confirm my sale date has been rescheduled and I have not been able to find out a other info I have to request from them specifically.
Bill
I do like Jesse, but as the case with many that are excellent at what they do, he is busy and booked usually two to three weeks out.
I realize this is just commentary, but it sure seems wrong to me that good people like you have to endure this much stress and frustration when all you are attempting to do is what your President and your lender have instructed you to do.
I say “let em fail” and allow smaller, more customer service friendly institutions have a chance at serving the public with tax payer support, instead of what we are getting today!
Melinda Opperman is the VP of Community Outreach for Springboard. She cares deeply about the consumer and has a quality team of counselors to assist.
Send me your e-mail and I will e-mail both you and Ms. Opperman to see what she might be able to do.
Also…
Have you checked to see if Fannie or Freddie own your loan? Go to my Helpful Links and follow the prompts to determine this. Next, call, e-mail and press the issue with whoever owns your loan, as well as WF. In other words, if they messed up, don’t allow some individual, who worked at Pup n Taco last week and is now playing Foreclosure God this week to determine your fate. Fight! I am convinced that too many of you are subject to the whims of whoever happens to be assigned your file that day. Their capabilities and personality flaws are too large of a factor in the determination of your loan modification. This shouldn’t be.
You mentioned NACA. Again, they are a HUD Approved Counseling Agency, but with an image problem. Their “tour” last year garnered a lot of press and they posted video clips of happy homeowners claiming; “NACA got my mortgage lender to give me 2% for 40 years”! I admit, I drank the Kool Aid. That is until I read the actual numbers.
They would claim to see 20 to as many as 60 thousand folks in a two to four day event. What they didn’t say was that the few that received help were the ones that were video taped and the others, the majority, walked away frustrated by the cattle call system and the fact that they were not helped.
In fact, the ones that were video taped had to of received a “Trial Mod” as oppossed to a permanent one, since US Treasury’s numbers do not come close to the reports coming out of NACA. Moral? Interview the counselor. Find someone who is a HUD Approved counselor who will listen you. Be brief and get to the point. Let them know that what you really want is for someone to make the calls to your lender on your behalf and if they receive push back, is willing to escalate the situation in order to obtain results.
Bottom line, you should not face foreclosure if WF has made a mistake. Thats almost criminal.