Foreclosure Criticism Stings Bank Of America And Wells Fargo

August 4th, 2008 | Tags: Foreclosure

Foreclosure related criticism stung the two lending giants Bank of America and Wells Fargo to respond. They could no longer remain impervious to condemnation and had to come forward to say that they were not tardy about helping people to stay in the houses that were their homes. They told the Congress of their good intentions in no uncertain terms. They reiterated their desire to do all that could be done to reduce the number of foreclosures.

Wells Fargo and Bank of America stated that they had lowered loan rates and or made arrangements for repayment schedules so that monthly mortgage payments became more affordable for borrowers. They said this on Friday at a hearing of House Financial Services in Washington.

Bank of America said that they had helped over 117,000 borrowers facing foreclosure from the month of January to June this year. It was an increase from the figures during the last half of 2007 commented the managing director of the Charlotte branch of the bank, Michael Gross. He added unequivocally, “Bank of America remains committed to helping our customers avoid foreclosures whenever they have a desire to remain in the property and have a reasonable source of income.” If the borrowers had the wish to continue to live in the houses they now occupied and if they had the means to afford new mortgage rates, there was no reason why the bank should not come forward to expedite a workout. Bank of America promised to modify loans totaling to at least $40 billion before 2009 drew to a close. This will mean that 250,000 borrowers would be benefited.

The bank regulators of USA as well as the lawmakers are putting pressure on mortgage servicers to be more helpful and proactive with the borrowers facing foreclosures.

Wells Fargo holds about one eighth of all the U.S. mortgages. It increased its working force from 200 to over 1,000 during 2005 so as to help the borrowers, said the executive vice president of Wells Fargo Mortgage, Mary Coffin. Wells Fargo, based in San Francisco, is said to have opened communications with 94% of its delinquent customers and lent a helping hand to 60% of those who were agreeable to work with the bank. She added that foreclosures would be considered as the last imperative after all other doors had closed.

But Julia Gordon of Center for Responsible Lending complained that they were not satisfied with the speed of help.