Wells Fargo Loan Modifications

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Wells Fargo will be modifying 15,000 loans in California per an agreement with the state attorney general. It will be a total of $2 billion in loan modifications.

Under the deal, the bank is also paying a total of $32 million to borrowers who lost their homes to foreclosure, according to the AG.

Attorney General Jerry Brown said Wells Fargo will offer modifications to 14,900 homeowners, who have so-called "pick-a-pay" loans.
"Customers were offered adjustable-rate loans, with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford," said Brown, who takes over as California's governor next month. "Recognizing the harm caused by these loans -- Wells Fargo accepted responsibility and entered in this settlement with my office."

Pick-A-Pay loans are loans where the rate changes throughout the life of it. Payments typically start out low and then would blow up. They usually start out so low that the monthly interest isn't even covered. Before you know it you end up owing more than you started out owing.

I am really glad that the people who chose those loans are going to get some help with loan modifications. I think every state needs to look into altering those loans before everyone loses their homes!!!

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This is good news and I am glad to see a bank taking responsibility for these people losing their homes.

I dont think a lot of people who get these kinds of loans read the fine print or are told in detail that there will be a balloon payment due at some time.

Plus, no one expected the economy to go sour like it did either and they probably werent able to save enough money to cover that big of a balloon payment.

But, like I said, at least the bank is taking responsibility.