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Wells Fargo denies telling homeowner to skip payments, offers $2 loan modification

Should homeowners skip payments?

When the economy slowed, so did Ohio homeowner Mike Elewski’s family owned business. Seeing the problem coming, he called his mortgage holder, Wells Fargo to ask for a loan modification to avoid oncoming problems and was informed they could only help if he was behind on his mortgage and Elewski claims they told him to miss payments so he could receive help.

Wells Fargo denies the claims, but most of us in the real estate industry have heard first hand this same advice coming from various banks- don’t pay and we can help.

Will $2 fix this? Huh, buddy?

Now, Elewski’s home is in foreclosure and in a judge ordered mediation session at which time he was offered a loan modification of $2 off his monthly mortgage payment leaving foreclosure eminent.

How homeowners are seeking resolve

Responsible homeowners being advised by banks to skip payments is akin to the welfare system advising someone to sell their car before they can qualify because their assets are too great. It creates a system of ridiculous demands on people who are trying to avoid destitution.

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Homeowners file complaints with their attorneys general to no avail. Wells Fargo seems impervious to bad public relations as more homeowners tell their stories to news outlets as often their only recourse. One shouldn’t have to go to any of those lengths, nor should they have to go on a hunger strike to get Wells Fargo to discuss a reasonable modification or find loopholes to foreclose on Wells Fargo branches.

How to fix this problem

It’s not a government program that will prop this situation up, it’s only banks that can fix their problems and for years, that problem has been refusal to communicate effectively or at all. If the government is thirsty to regulate something or put a program into place, let it be regulation of effective bank communication.

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13 Comments

13 Comments

  1. I’ve had Wells Fargo tell a home owner to stop paying if he wanted his short sale approved. Actually told him that he must be 61+ days late….?!?!

    Anyone else out there?

    • Lani Rosales

      March 25, 2011 at 6:00 pm

      Brad, I’m not a Realtor, but I hear of this happening a lot in conversation with Realtors and most are exasperated by it. Homeowners are even MORE exasperated by it. And when they listen, this is where they end up. When they don’t, this is where they end up.

      • John Perkins

        March 27, 2011 at 12:39 pm

        My clients had Wells Fargo staff tell her to stop making payments for 61 days too. What a bunch of liars and that makes me angry that they would say they don’t suggest this as a method. Why would my clients tell me this exact phrase before I put their home on the market to sell it pre-forclosure. Wells Fargo said after all this that they weren’t approved. So not only did they follow the suggestion but were hit with lowering their credit score.

  2. Sig

    March 26, 2011 at 9:07 am

    Banks deny doing this but REALTORS see it every day. Why deliberately hurt someone’s otherwise good credit by advising them to skip some payments? Because if your credit score sinks, banks and other lending institutions can use this as an excuse to charge higher rates on everything else you buy on credit. They can use this as an excuse to raise your credit card rates on amounts you owe. I don’t know what argument anyone could use to convince me and many other REALTORS that all of the lending institutions are in this together. It’s a scam that makes Bernie Madoff look like a rookie.

  3. Julie Emery

    March 26, 2011 at 8:55 pm

    I don’t think there’s a Realtor out there doing short sales on a regular basis who hasn’t come across this tactic by banks. It’s one thing if you’re dealing with a reputable partner and they tell you to take this kind of risks. Unfortunately, there’s nothing the least bit reputable about most banks these days and sellers would be well advised to be very careful about following this advice. And they wonder why so many folks end up in foreclosure! Duh!

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