Wells Fargo Merger Gives 478,000 Wachovia Customers Access to New Wells Fargo Solutions if Their Mortgage Payments Become At-Risk

With the Dec. 31, 2008 completion of the Wells Fargo / Wachovia merger, Wells Fargo has begun to aggressively use current streamlined approaches and new customized solutions to avoid preventable foreclosures for Wachovia mortgage customers. In total, 478,000 Wachovia customers – including those with Wachovia Pick-a-Payment loans – will have access to the program, primarily those whose loans are delinquent or are likely to become delinquent will be eligible for assistance. Given changing economic factors, the exact number of customers expected to be helped in this approximate $120 billion portfolio cannot be provided. Customers with loans being referred to foreclosure or that are in foreclosure will receive an extension until Feb. 28, 2009 to allow them time to contact and work with Wells Fargo on the new solution most appropriate for their circumstances.

"As the ‘investor’ for these loans, we are rapidly designing programs to help these customers,” said Mike Heid, co-president of Wells Fargo Home Mortgage. "For those at-risk, we will offer combinations of term extensions of up to 40 years, interest rate reductions, charge no interest on a portion of the principal for some period of time and, in geographies with substantial property value declines, we will even use permanent principal reductions.”

Heid said the goal of any modification is to achieve sustainable and affordable mortgage payments generally targeting a 38 percent mortgage payment-to-income ratio. The company will continue to work case-by-case with all at-risk customers to understand their financial situations to determine if lower levels may be appropriate.

To help customers with solutions, Wells Fargo increased its full-time default/home retention staff 125 percent to almost 6,000 in the last two years. Wachovia increased staff 330 percent to almost 2,000 last year alone. In 2009, Wells Fargo will continue to further increase these teams, all U.S.-based, as demand warrants.

Leading the Way Home

Wells Fargo also is expanding its Leading the Way Home national program to continually promote responsible lending, keep people in their homes, and help stabilize communities hit hard by foreclosures.

"Wells Fargo has remained a stable source of funding throughout the mortgage crisis, due in large part to our long-standing responsible lending and servicing principles,” Heid said. "As a result, 93 of every 100 Wells Fargo mortgage customers are current on their mortgage payments – performance consistently better than industry averages. We will continue Leading the Way Home by doing what is right for Wells Fargo customers and the new Wachovia customers brought to us through the merger.”

Working with the U.S. Treasury, the Department of Housing and Urban Development (HUD), HOPE NOW and others, Wells Fargo has led the development of programs that have delivered nearly 3 million solutions industry-wide to consumers to avert foreclosure from July 2007 through Nov. 2008. Of this total, more than 650,000 solutions were delivered by Wells Fargo to its customers. Of the servicing portfolio Wells Fargo Home Mortgage manages, 97 percent of the mortgages are owned by other investors. The company has and will continue to work with these investors to create streamlined processes that meet contract terms.

Through active calling and letter-writing campaigns, workshops, regional outreach events and door-to-door contact, Wells Fargo Home Mortgage has reached 94 percent of its customers who are two or more payments past due. For every 10 of these customers, it has worked with seven on a solution, two declined the help, and the remainder cannot be reached or a solution simply cannot be found. Of the customers who received a loan modification, one year after the loan was modified approximately seven of every 10 of these customers were either current on their loans or less than 90-days past due.

"From the beginning of this crisis, we have been diligent in our efforts to help customers,” said Heid. "As the economy has become even more challenging, more work has been required to get the job done. Currently, for instance, we are ready to implement new improvements to the FHA programs as they are finalized.”

In addition to continually promoting responsible lending and reducing foreclosures, through its Leading the Way Home program Wells Fargo is working to stabilize communities by building on its comprehensive homeowner assistance programs and investing funds to accelerate the preparation and sale of bank- and investor-owned properties.

This includes helping real estate agents, not-for-profit housing organizations and city officials understand how to sell vacant and foreclosed properties to new owners, including first-time homebuyers. As part of this effort, the Wells Fargo Housing Foundation will help city officials and not-for-profit housing organizations to gain access to $3.9 billion in federal housing dollars available Feb. 1, 2009, through the Housing and Economic Recovery Act (HERA). Wells Fargo also will provide $2 million in grants, will help new buyers with financing and, in select areas, will provide loan education that reinforces responsible homeownership.

Not-for-profit housing organizations that provide affordable homeownership or rental opportunities to low-to-moderate income families can contact the Wells Fargo Housing Foundation (612-667-5131) for information about the company’s REO Discount Program. Government entities can also participate by contacting Wells Fargo through a dedicated phone number (866-518-2164). Organizations seeking discounted property must be tax exempt under Internal Revenue Service Code 501(c)(3) or be a government entity. Properties considered for discount are listed on the Premiere Asset Services Web site www.pasreo.com or http://reo.wachovia.com.

Wells Fargo Home Mortgage is one of the nation’s leading retail mortgage lenders and services one of every seven mortgage loans in the nation. A division of Wells Fargo Bank, N.A., it has a national presence in mortgage stores and banking stores, and also serves the home financing needs of customers nationwide through its call centers, Internet presence and third-party production channels.