Wells Fargo completes 35% of AG settlement relief
Wells Fargo (WFC) said it provided 35% of its homeowner relief required under the robo-signing settlement struck in March.
The San Francisco bank agreed to provide $4.3 billion in total relief and expects to complete the entire commitment within one year of the settlement. Bank of America (BAC) made the same claim this week after the monitor released its first report Wednesday.
Through June 30, Wells completed or started relief totaling a gross dollar amount of nearly $1.5 billion. The gross amount will be credited differently toward the $4.3 billion based on the type of relief given. But based on Wells' own calculation, it's more than one-third of the way there.
Wells also committed to provide $903 million in refinances, according to the settlement. The bank so far refinanced nearly 8,600 mortgages for $314 million in interest savings.
It completed 2,100 principal write-downs for a total of $216.8 million in mortgage debt forgiven. Counting first and second-lien trials, the bank said Thursday it has approved a total of $745 million in principal reductions for more than 7,700 borrowers.
For every dollar a servicer reduces on loans it holds in its portfolio, it receives the full dollar credit toward the settlement figure plus an extra 25 cents if the write-down was completed within the first year of signing the agreement. The servicers seem to be rushing to take advantage of doing less in a quicker timeframe, based on these incentives.
Like the other servicers, Wells focused most of its relief so far through short sales. It completed 7,500 of them under the settlement through June 30 and waived $733 million total in left over principal for the borrowers.
For every dollar the servicer pays to a second-lien holder in order to get a short sale done, it gets a full dollar in credit toward the settlement – which is more than double the credit given for reducing principal on private-label mortgages not on its portfolio. Many of these second liens, however are owned by the four largest banks involved in the settlement, but what second-lien holders are being paid is not disclosed.
The servicer does get 45 cents of credit on every dollar of deficiency forgiven on the first lien under a short sale as well.
The settlement also has more than 300 new servicing standards each bank must install, including single points of contact for struggling borrowers and new oversight to ensure document integrity.
Wells said it would have all rules fully implemented by October.