Wells Fargo 'Nightmare' For Homeowner Applying For Help Under Administration's Anti-Foreclosure Program

As stories of the troubled HAMP program roll in, more and more mortgage lenders are being named and shamed. Bank of America has had a number of issues, and you can add Wells Fargo to the list.

From HuffingtonPost.com:

Wells Fargo put an Illinois woman though a "nightmare of harassment, frustration, and relentless stress" when she tried to apply for a mortgage modification under the Obama administrations' Home Affordable Modification Program, according to a lawsuit filed in federal court this week.

It's a familiar nightmare to many lured by HAMP's promise of reduced monthly payments. More people have been bounced from the program than have received "permanent" five-year modifications, and federal auditors say the program sometimes actually causes borrowers to lose their homes.

Therese Crowley of Deerfield, Ill., facing reduced income because of health problems and less demand for her broker services, first asked for a HAMP application in April 2009. Wells Fargo allegedly dragged its feet for four months before it sent one along, then denied the application in October and gave her bogus explanations when she called to complain.

In November, Wells Fargo told Crowley to apply again, then denied her again the following month. A week later she called the bank and spoke to a woman named Paula, who "determined that Wells Fargo had erroneously overstated Crowley's income by $2,800," the complaint alleges. "Also, the file erroneously indicated that Crowley owed $2,381.07 per month on a credit card debt which in fact had been paid off in 2002. Paula agreed that with the correct information (information that Wells Fargo had during this entire process), in her opinion Crowley qualified for a HAMP loan modification."

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Wells Fargo Earns $2.4B, Says Credit Is Improving

Despite expectations, Wells Fargo has announced that their credit improved in the force quarter of 2010, and that their losses were much less than had been predicted. Many experts are calling the positive news a sign that American financial institutions are on the road to recovery, along with the economy as a whole.

According to the Associated Press, Wells Fargo & Co. said Wednesday its first-quarter earnings fell 1 percent to $2.37 billion as the bank dealt with continuing losses on consumer loans. It also originated fewer mortgages compared to a year earlier as refinancing activity trickled off.

However, the bank said it believes it has "turned the corner" with its credit problems.

The results surpassed expectations and provided further evidence that the banking industry and the economy are recovering. Wells Fargo rose in early trading and hit a new 52-week high of $34.25, but was down 62 cents, or 1.9 percent, at $33.06 by midday.

Investors appeared to have doubts about consumers' ability to pay their bills because many banks are still reporting a high number of loan defaults.

San Francisco-based Wells Fargo joined other big banks in the most recent quarter in reporting improvement in their consumer loan businesses.

Continue reading at Google News…

Financials Fade a bit as Wells Plans TARP Repayment

From MarketWatch.com:

The U.S. financial sector was down slightly in early trading Tuesday with Wells Fargo & Co. pricing an offering of nearly $11 billion of common stock as it became the latest big bank to unveil plans to repay the government's bailout loan.

Wells Fargo announced late Monday that it would raise the money to help fund a repayment of the $25 billion the firm received under the Troubled Asset Relief Program, or TARP. The company is the last of the original, large U.S. banks to agree to pay back the government. See earlier story on Wells Fargo's latest plan to repay TARP.

Wells Fargo shares were up about 1% at last check Tuesday morning.

In the broader sector, the Financial Select Sector SPDR Fund was off fractionally. The exchange-traded fund had risen the previous two trading sessions.

Citigroup Inc. shares were off a bit on heavy trading volume. The bank on Monday said it will sell about $20 billion in new securities to repay TARP as it tries to get out from under the government's thumb.

Wells Fargo Sued Over Home Equity Lines of Credit

This morning I was surprised when I came across this new Associated Press article reporting that the popular U.S. bank Wells Fargo & Co. has run into some legal trouble. According to the lawsuit, Wells Fargo has been accused of illegally reducing the size of customers’ home equity lines of credit. Check out the full story below.

The suit, which was filed in Illinois, claims Wells Fargo failed to accurately assess the value of customers' houses before deciding to cut the size of their credit lines. San Francisco-based Wells Fargo is being accused of using unreliable computer models that wrongly valued home prices too low to justify cutting the size of customers' loans.

Home equity lines of credit are similar to credit cards in that a customer has a credit limit and can continue to borrow money until the limit is reached. Once a portion is paid off, it again becomes accessible to borrow. But, home equity lines of credit are backed by a borrower's property, whereas credit cares are unsecured.

Michael Hickman, who filed the lawsuit on behalf of himself and is seeking class action status for it, claims Wells Fargo also did not provide proper notice that the bank was reducing the size of the credit lines.

The bank's notice for reducing the lines also did not specifically provide a new estimated value for the property or the method used to determine the houses value. Hickman's lawsuit said that information was needed so a customer could challenge the change in the credit limit and try and reinstate the previous limit.

Hickman is being represented by KamberEdelson LLC, a Chicago-based law firm, which is also representing clients that have filed similar suits against JPMorgan Chase & Co. and Citigroup Inc.

Continue reading here…

Wells Fargo Projects Record $3 Billion 1Q Profit

From Yahoo Finance:

Wells Fargo & Co. said Thursday it expects record first-quarter earnings of $3 billion, easily surpassing analysts' estimates and providing an encouraging sign for the banking industry.

Wells Fargo is the first major bank to give an indication of how the first-quarter looked. Several pessimistic forecasts about potential loan losses have jolted the market in recent days, and investors have been anxious as Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. all report next week.

Wells Fargo's stock surged $2.71, or 18.2 percent, to $17.60 in midday trading. Broader markets also rose on the Wells Fargo report, with the Dow Jones industrial average gaining more than 159 points to 7,996.

San Francisco-based Wells Fargo, which has received $25 billion in funds as part of the government's bank bailout plan, anticipates earnings after preferred dividends of about 55 cents per share. Revenue for the period ended March 31 is expected to climb 16 percent to $20 billion.

Analysts polled by Thomson Reuters forecast profit of 23 cents per share on revenue of $19 billion. Analysts' estimates typically exclude one-time items.

Wells Fargo earned $2 billion during the first quarter last year.

The bank's chief financial officer, however, did caution that the economy hasn't necessarily recovered yet.

"It's premature to conclude the economy has turned," said Howard Atkins, Wells Fargo's CFO. "All I can tell you is we're seeing a lot of business."

Revenue at Wells Fargo, which has been one of the strongest banks during the ongoing credit crisis and recession, was bolstered by strong mortgage banking and capital markets business, Atkins told The Associated Press. During the first quarter, Wells Fargo received about $190 billion in mortgage applications, a 64 percent jump from the previous quarter. More than 40 percent of that volume came in March.

Most of that business was refinance applications, but about 25 percent came from customers looking to purchase homes, Atkins said, noting the recent quarter's mortgage activity has been among the strongest quarters since the housing market began to collapse in 2007.

The government has been implementing many new programs in an effort to cut interest rates, hoping to bolster the beleaguered housing market, and those programs have definitely helped, Atkins said.

"For sure the reduction in interest rates is having an impact on the wave of activity in the mortgage market," Atkins said.

The company also credited its Wachovia acquisition, which was completed Jan. 1, for helping boost revenue. Atkins said Wachovia accounted for about 40 percent of revenue during the first quarter, and that business at Wachovia has steadily improved since Wells Fargo announced it would acquire the Charlotte, N.C.-based bank last fall.