BY BILLY BRUCE
The Valdosta Daily Times
April 12, 2008 12:54 am
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VALDOSTA — A query to local mortgage lender Wells Fargo Home Mortgage, located at 406 N. Valdosta Road, for advice to consumers on how to avoid or survive foreclosure produced the following responses.
The local office forwarded e-mailed questions to Wells Fargo’s home campus in Des Moines, Iowa, where company communications officer Debora Blume provided the following responses:
Q: A lot of folks might believe banks or lending companies can't wait to get their hands on your property and are sitting like vultures waiting to jump at the chance to foreclose. But the fact may be that foreclosure is the last option a lender wants to exert because it's a no-win situation for any involved party. Is that in fact the case? (the latter scenario)
A: Wells Fargo Home Mortgage has a number of options available to help customers who are facing financial difficulties.
We use foreclosure only as a very last resort. We make every attempt — within the confines of investor requirements — to develop an individualized solution that helps our customers get through a difficult time so they can stay in their homes.
Every party to a foreclosure loses — the borrower, the community, the investor and the mortgage lender. Profitability for the mortgage industry rests in keeping a loan current and, as such, the interest of the borrower and the lender are aligned. Therefore, mortgage lender have a significant incentive to prevent foreclosures.
Our national foreclosure rates have historically been below the industry average; currently 0.88 percent compared to the industry average of 1.18 percent (as of fourth quarter 2007).
We work hard to keep our customers in their homes, whenever possible, if they do experience financial difficulties.
We also proactively contact customers, and work with them on potential solutions based on their personal financial circumstances.
Q: What signs might homeowners see that should warn them to take preventative action to avoid foreclosure ... like, if you missed the second payment in a row and know you're going to miss the next one too ... what should you do?
A: Timing is critical for borrowers facing financial difficulty. Homeowners should begin by calling us and expressing their interest in keeping their home; the sooner a homeowner reaches us, the more options we have to find a solution. The homeowner should prepare for the call by gathering income and expense documentation that might be needed to consider a potential modification.
Q: If a homeowner already has been snagged in a foreclosure, is there any way out to keep the home?
A: Wells Fargo's servicing approach is unique in that we work with borrowers to offer them solutions at every stage of default continuing up to the point of foreclosure sale. Through this multi-step effort, we maximize the customer's access to available loss prevention options.
Q: We keep hearing about potential federal help for homeowners and lenders. Is any of that on the way? How soon?
A: Wells Fargo can't answer this question. Perhaps contact the HOPE NOW organization for more information about what's going on at the federal level. Also the Mortgage Bankers Association may be able to help provide an answer.
Q: What can a potential homebuyer do to avoid any preventable circumstance that could lead to a foreclosure... like... don't borrow in over your head, don't get a monthly payment that's more than 35 percent of gross monthly income, don't get into dumb risky loans, etc.
A: Areas where home values are depreciating at a fast rate are the most challenged in terms of foreclosures. This includes areas where investor-owned properties and related exotic loans are high, such as Florida. Nearly 60 percent of subprime ARM foreclosures are occurring in eight states: Arizona, California, Florida and Nevada have experienced rapid price appreciation followed by today's market correction, and in Illinois, Indiana, Ohio and Michigan have been affected by job loss.
Frequent root causes for delinquency remain job loss, illness, marital status change and death. As of late, consumers are also citing increased energy costs and other utilities, as well as insurance and taxes in unique markets where weather has been an issue, as key factors of being financially overstretched .
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