If you're having problems with your mortgage, it's a good idea to communicate with your bank to see if you can work with them for some sort of agreement to stay out of foreclosure.
Your bank can choose to give you an unemployment forbearance that temporarily suspends your mortgage payments because of a job loss, for example. Or, if you're already behind on your mortgage payments due to a hardship, you may be able to get a loan modification that reinstates your mortgage with a more affordable payment.
Loan modifications are the only option many homeowners have to keep their home. The terms of the loan, such as the length of the loan, the interest rate, and the principal balance can be changed.
Loan modifications are a life saver for those who get them. Unfortunately, many Wells Fargo borrowers end up disappointed when they don't get the results they're looking for after trying to deal with the bank on their own. And Wells Fargo has a reputation as one of the most difficult banks to work with for a loan modification.
Wells Fargo Loan Modification Process Called "Kafkaesque"
A 2013 lawsuit filed by New York Attorney General Eric Schneiderman said borrowers trying to get a loan modification with with Wells Fargo experienced “kafkaesque delays and obstructions.”
To be clear, calling something Kafkaesque is not a complement. It's a reference to the writings of Franz Kafka whose work featured characters dealing with “incomprehensible social-bureaucratic powers.”
Schneiderman described “a pattern of obstructive practices designed to avoid reasonable modifications to loan terms by burying homeowners in paperwork and besieging them with bureaucratic delays and dead ends."
That lawsuit was settled and Wells Fargo has made improvements to their process, but there are still many complaints we hear from homeowners trying to get a loan modification.
(See also 3 Tips for a Successful Wells Fargo Loan Modification)
Common Wells Fargo Loan Modification Complaints
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Being denied for a loan modification. The majority of homeowners who apply for a loan modification on their own are denied. Too much or too little income can make it look like you either don't need assistance, or can't afford to keep the home. There are many reasons you can be denied, and they are all disappointing to the homeowner searching for a way to keep their home.
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Sending in the same documents multiple times. This may be the most anger-inducing issue with loan mods. Sometimes the bank says it lost the documents you sent in, or they blame it on you and say they never received them. And sometimes the application is under review for so long that the documents expire and updated ones have to be sent in.
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Confusion. Not knowing what's going to happen with your home and biggest investment is very scary. When you're new to the loan modification application process the whole thing seems like a foreign language to you. You know you're trying, but you have no idea if you're doing the right thing and if it will work.
What Can Be Done About It?
When you don't have experience with loan modifications, you don't know if you're putting all of your time, energy, and hope into something that's never going to work. It may be that it's not possible to modify your loan with the income you have, and that you should be putting your energy into showing more income, or trying for something like a short sale or deed in lieu of foreclosure.
A knowledgeable professional can advise you on whether or not it's likely that you'll be able to keep your home. And a good attorney can defend you from foreclosure, often for years, no matter what your intention is. Some of our Wells Fargo case results are available here.
Wells Fargo, and the other banks as well, can be difficult to deal with. Don't try to go toe to toe with them on your own. It won't be a fair fight. Get a qualified professional on your side to ensure that you stack the odds of getting what you want in your favor.
