Wells CEO Says Recent Mortgage Modifications Performing Well
John Stumpf, the president and CEO of Wells Fargo (WFC) said that they’ve stepped up their loan modification program and is seeing some advances early on. “We can’t declare success yet, but we’ve had positive early performance from the loans that have been modified,” Stumpf said at the Barclays Capital Global Financial Services Conference this week. As of the end of June 2009, Wells Fargo serviced $1.7trn in consumer mortgages, which is 1 in 6 of the total US mortgages serviced, Stumpf said. More than 92% of Wells’ customers in their entire servicing portfolio remain current on their mortgage payment. “Our delinquency and foreclosure rates continue to be lower than industry averages and the lowest for all 2008 and 2009. Less than 2% of owner occupied properties have actually proceeded to foreclosure sale,” Stumpf said. Stumpf said that Wells Fargo offers a combination of term extensions, interest rate reductions and in some cases, even permanent capital principal reductions, but that customers must have a desire and the ability to repay their loans to qualify. Although he said that not all can qualify for government programs such as the Home Affordable Modification Program (HAMP), which provides cap incentives to servicers for the modification of mortgages on the verge of foreclosure, some require just a little help. “We have 12,000 decked against this challenge and we’re doing roughly 1,700 modifications a day so it’s very, very busy,” Stumpf said. Wells Fargo acquired Wachovia Corp. (WB) last year, and that under the Pick-a-Pay loan modification program, monthly mortgage payments were adjusted by an average 20% and cut a total of $1.8bn from their principal balances, Stumpf said. Write to Jon Prior.