Now there is the understatement of the year. In an article on The Business Journal, Mike Heid, co-president of Wells Fargo’s mortgage unit is quoted as saying, “We know we’ve fallen short of our customer service goals in some cases.” The reason? Wells Fargo has only modified six percent (6%) of eligible loans under the HAMP program.
By comparison, Chase had modified 20% and Citigroup 15%. On the other end of the spectrum, Bank of America had only modified four percent (4%).
“We think they could have ramped up better, faster, more consistently and done a better job serving borrowers and bringing stabilization to the broader mortgage markets and economy,” said Michael Barr, the Treasury Department’s assistant secretary for financial institutions. “We expect them to do more.”
Possibly. But these lenders have to add and train staff. That takes money and time and servicers are getting compensated very little for doing these modifications. The better resolution would have been to allow modifications in Chapter 13 bankruptcy. That would have required very little additional investment by servicers, but would have made it readily available to the most needy borrowers.
The lending industry is asking for patience, saying the industry needed time to implement the program.
Very interesting. Will these same lenders exercise patience waiting for borrowers to make unmanageable payments because the lender does not have the staff to process the loan modification? Call me synical, but I doubt it.