Banks Modify Loan Procedures With One-In-Five Bay Area Homes Under Water
SAN FRANCISCO (CBS SF) — As the housing crisis continues, banks are evolving in the way they handle loan modifications. 22% of homes in the Bay are under water, according to the real estate tracking website Zillow.
That means homeowners owe more on their houses than the properties are worth.
Senior Vice President at Wells Fargo Home Mortgage Diane Stauffer said some homeowners are still having trouble making payments.
KCBS’ Margie Shafer:
“93% of our customers are paying on time right now, but about 7% are what we consider seriously delinquent,” said Stauffer. “We do hold a lot of loans so 7% is a significant number.”
Some banks admit they are playing catch-up as requests for loan modifications continue.
Nationwide Wells Fargo has modified 700,000 mortgages from January, 2009 through June, 2011. Stauffer said the process takes quite a bit of time.
“It’s on average about 16 months from the first default through foreclosure sale,” she said.
“We actually reach out to our customers over 200 times trying to get them to call in and work with us.”
Wells Fargo’s process for dealing with mortgage delinquencies has evolved throughout the housing crisis, making modifications a little easier. In addition to an increased number of phone calls made to the customer, the bank now provides a single point of contact.
A loan holder is assigned to a bank employee as they navigate through the process of trying to save their home.
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