Wells Fargo Bank to provide affordable loan modifications to thousands of California homeowners
World Savings Bank, Wachovia Bank
LOS ANGELES, Calif.—Wells Fargo will provide loan changes worth more than $2 billion to thousands of California homeowners and provide an additional $32 million to thousands of borrowers who lost their homes through foreclosure, the state Attorney General's Office announced today.
None of the loans were made by Wells Fargo. All were originated by World Savings and Wachovia —both banks that Wells Fargo acquired, according to the Attorney General's office.
"Customers were offered adjustable-rate loans with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford,'' said Attorney General Jerry Brown.
"Recognizing the harm caused by these loans, Wells Fargo accepted responsibility and entered into this settlement with my office.''
The adjustable-rate mortgage loans allowed borrowers to make payments at various levels. The highest level fully covered the monthly interest and principal due. Another level covered interest only.
Payment were insufficient to cover the monthly interest owed and the unpaid interest was added to the loan balance. Ultimately, the loans would reset, increasing the monthly payments dramatically, according to the Attorney General's Office.
Faced with unemployment, dramatic declines in home prices and the sharp escalation of monthly payments, thousands of borrowers were unable to meet their mortgage payments.
The settlement with Wells Fargo covers loans made by World Savings Bank, a subsidiary of Golden West Financial Corp., and Wachovia Bank. Wachovia purchased World Savings in 2006, and Wells Fargo then acquired Wachovia in 2008.
Under the settlement, Wells Fargo will offer affordable loan modifications to an estimated 14,900 California borrowers with the loans at issue made by World Savings or Wachovia. Many of the modifications will include significant principal forgiveness.
Eight other states, including Arizona. Nevada, Colorado and Washington, have reached similar settlements with Wells Fargo, according to Brown's office.
California borrowers eligible for loan changes will be notified by Wells Fargo within two months.
Borrowers whose homes were foreclosured upon will be contacted during the next six months.
Further information and updates are available from the Attorney General's website, ag.ca.gov.
A grateful John Edward Smith happily joined a small group of family and friends at his exoneration party Saturday, where he was welcomed with applause, cheers, and tears of relief. Smith was exonerated on Sept. 24 after spending 19 years in state prisons, most recently at Calipatria State Prison in Imperial County for a crime he did not commit.
“Thank you everyone for getting me back to my grandmother,” said the 37-year-old man. “She was the source of my faith and strength.”
LOS ANGELES, Calif.—An art supply chain store canceled its “urban art” promotions in metropolitan Los Angeles at the request of City Councilman Dennis Zine, an ex-cop who accused the company of promoting graffiti, it was announced today.
LOS ANGELES - Homeboy Industries and other projects to create jobs in Los Angeles have been awarded a share of $1 million in grants from the Federal Home Loan Bank of San Francisco, it was announced.
The Access to Housing and Economic Assistance for Development (AHEAD) program grants - amounting to between $20,000 and $50,000 --are handed out each year, to support economic and community development and affordable housing projects in California, Arizona and Nevada.
LOS ANGELES, Calif.—A Los Angeles-based meat company is recalling more than 377,000 pounds of ground beef due to possible E. coli contamination, the U.S. Department of Agriculture announced today.
The affected ground beef was produced by Commercial Meat Co. between Sept. 7 and Thursday, and was shipped to restaurants in California and Nevada, according to the USDA’s Food Safety and Inspection Service. No illnesses have been reported.
The possible contamination was discovered during routine testing.
IRVINE, Calif.—Law enforcement officers sought the owner of a Costa Mesa refinance and escrow company charged with felony grand theft in a loan modification scheme that defrauded customers in California and at least four other states.
