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Wells Fargo MBS - Denial letter - Anyone have WFMBS and get an inhouse or HAMP permanent modificatio

Discussion in 'Wells Fargo - American Servicing Company (ASC)' started by stillhoping, Feb 16, 2010.

  1. stillhoping

    stillhoping LoanSafe Member

    Okay - Finally got my official HAMP denial in writing, now for six months we have been told, confirmed and reconfirmed that Wells Fargo is the investor, so here's what they put in writing:

    I can confirm that your loan does not have one individual investor, rather a group of investors, known as a Mortgage Backed Security (MBS). A MBS is an investment instrument which represents an undivided, fractional interest in a pool of mortgages. Mortgage loans are purchased from banks, mortgage companies, and other originators. Then, these loans are assembled into pools. Therefore, Wells Fargo Home Mortgage must adhere to the guidelines set forth by the group of investors in this pool.

    Please be aware that the Making Home Affordable Program was originally established targeting those homeowner's with loans that are held or guaranteed by investors Fannie Mae (FNMA) and Freddie Mac (FHLMC). Unfortunately, MBS loans are not currently participating in the Making Home Affordable Program. I can confirm that MBS loans do not currently allow a permanent loan modification.

    The letter goes on... However, are they saying that not only do they NOT participate in HAMP, they do not provide in-house Mods either??? That's is how I am interpreting the last sentence. Which then goes back to 13 months of being asked to send financials, being told our trial was all signed and ready to be made permanent upon successful payments and documentation. If the WFMBS, does not participate in modifications period, why the run around? So, were they lying for 13 months or lying now? And when does this 'lying' to borrowers become simply against the law.

    Which brings me once again, how do I find out what series or pool we are in? I have gone over EVERY report I have access to on the ctslink, and have not seen my loan. I have tried googling my loan number, nothing. I am confident that my loan falls into the the 2006 series (which has about 30 reports) because 99.9% of those loans originated in '06 like mine; and we've never refinanced. But just to be sure, I have also looked at all the '07 and '08 reports - nothing! There are a few reports that have restricted access and we must be somewhere in there. However, if I could just find out the series and pool number, I could at least google the MBS and gain more information. (I noticed other series come up when you google WFMBS....)

    Lastly, has anyone with a Wells Fargo MBS received either an in-house or HAMP permanent modification.
  2. annpsych

    annpsych LoanSafe Member

    I am sorry you had to go through this awful experience. What I can not understand, if theyknow from the beginning that the homeowners do not qualify, why the runaround? At best it is negligent at worst it seems like they want homeowners to fall behind in their payments. I do not think they talk to any group of "investors." I really think they are just looking for a reason to say no. Honestly I think HAMP is a house of cards a mirage, just to make it look like the government is doing something to fight the real estate crisis. It appears like the government "cares" however the reality is they are just simply ignoring the situation. I hope you have contacted your state attorney general, they really need to be looking into this since so many on this forum have reported similar stories.
  3. davephx

    davephx LoanSafe Member

    Sadly it is a fact that the participation agreements on the MBS pools often do prohibit mods which would include inhouse. The government really can't be known to break private contracts.

    The fact that Fannie and Freddie is now buying out their delinquent loans is causing their guaranteed MBS values to drop especially since most are from when interest rates were higher. The GSE's DO have the right to do this if they are providing the guarantee which is the case with about 70% of first mortgages in the U.S.

    But private mortgage pools have contract terms that a servicer (nor the government) can violate.

    The NPV Test under HAMP was suppose to be the "excuse" to modify loans when it is in the best interest of investors vs foreclosure which provided some "safe harbor" for servicers to modify or try to modify loans from other banks.

    In theory (but often not in reality) even if the investor bank isn't required to participate in HAMP (didn't receive TARP funds) the NPV is suppose to show them it is still in their best interest to accept a modification, even if not required to participate.

    But the private MBS pools are different since a mortgage may be owned in bits and pieces by many different investors who buy the pool. So you can't just get investor approval like if another bank owns the mortgage.

    The issue of course is shouldn't the servicer known this to start with but strung you and many others out while they collected their servicing fees to do so.

    There are major problems even getting Fannie/Freddie mods approved but sadly the MBS unlucky like in Vegas is a bad situation.

    We have no choice in who winds up with our mortgages especially if not "conforming" and qualified originally to be guaranteed by Freddie or Fannie (Or Ginnie but that is FHA which is another difficult issue with FHA-HAMP).
  4. stillhoping

    stillhoping LoanSafe Member

    davephx - Wells Fargo told our HUD counselor and confirmed to us several times that Wells Fargo is the investor on our loan. Can both be true? Could the name be under WF but it be a pool of private investors? WFMBS??

    And, I agree, the services are raking in additional fees and charges when they should be able to tell a borrower within 7-10 business days that the investor guidelines would prevent a permanent modification.

    Also, is it also true that most of these MBS's do not do permanent modifications?

    The only thing WF offered, which they reneged over a signature, was to piggyback our delinquencies. Since the reneged that offer, we have been told to once again resubmit financials. ??? If the document was not filled out correctly, but it was signed and returned and the payment was made - doesn't that show the borrowers intent on acceptance? Why they couldn't just send a corrected copy? Why the request for financials again? Especially if they do not participate in permanent modifications?

    It's nuts!!! I'm going to contact my rep in the exec offices again. Any advice or further insight, would be greatly appreciated.

    Thank you!!!
  5. podge8

    podge8 LoanSafe Member

    Ask for an in-house mod. Most MBS prohibit permanent mods, but do give the servicer (Wells Fargo in this case) wide latitude in modifying loans temporarily. I think you mentioned in another post that we have the same type of loan, and our interest rate was lowered 1% for five years. Very modest, but every little bit does help. Propose something like that to your contact in the exec. offices, perhaps a few percent reduction over five or ten years. See what they come back with. I'm sorry I can't give you more help in searching which series your loan came from. I found mine out of sheer luck, I think! You might just have to go through CTSlink and/or Edgar on the sec.gov website and go through every series in 2006 to find one with your loan number in it. A pain because there are at least 18 of them, but if you have the time...

    Best of luck, and keep trying! Don't let them win!
  6. stillhoping

    stillhoping LoanSafe Member

    Podge8 - I thought we were in line for an in-house mod, which is what we were told in Sept. when they gave us the forbearance. Nevertheless, upon final review they offered to put our delinquencies on back of the loan (which they have since reneged over a signature).

    I doubt we will be offered any more than what has already been offered, because we clearly showed intent of acceptance by signing the doc and making the payment. If we could also get even 1% down, that would be icing at this point.

    I have gone through every report through ctslink from '06-'08 - nothing!!! There's one report under Wells Fargo Home Equity Trust 2006-NIM2 and all Wells Fargo Mortgage Asset-Backed Securities, that have restricted access. I can only conclude that our loan is in one of those locked up reports. Ugh! I will try the other link you gave, but I think I tried that same on last night as I was combing through everything I could on the net.

    Was your specific loan a MBS? That would be helpful to know.

    Thanks for sharing all your experience. I really got much out of your letter that stated to WF the guidelines of your pool. That is now what I am trying to do for myself. Knowledge is power and I realize now how much of the puzzle I've been missing. I could gripe about the process and how they could make things easier by spelling it out from the beginning....but what's the point; damage is done.
  7. stillhoping

    stillhoping LoanSafe Member

    Podge8 - I believe I found us on the sec.gov under 2006-10. We were definitely listed several times on an origination report under that pool. I went back to the ctslink, but our loan number does not come up, maybe because they haven't yet filed a NOD??? That is why I have been having so much trouble.

    Can you please advise me from here? What am I looking for in the Edgar reports that shows the guidelines? I want to quote the guidelines, like you did, to let them know they DO have the authority to modify our loan. I read through the shelf reports of completed mods, and only found 1 for our series. However, the 1 had a mod of 3.5%....so I KNOW it's possible.

    Your input, once again would be greatly greatly appreciated!!!
  8. davephx

    davephx LoanSafe Member

    Sigh...no can't be both.

    Here is more info on the pools I also posted on another thread:
    An MBS is a security issued by a trust (SPV) that has been specially created for a securitization transaction.

    The decision to modify mortgages held by an SPV rests with the SPV’s agent, call the servicer.

    Servicers carry out their duties according to what is specified in their contract with the SPV.

    This contract is known as a “pooling and servicing agreement†or PSA. PSAs frequently place restrictions on servicers’ ability to modify mortgages.

    Sometimes the modification is forbidden outright, sometimes only certain types of modifications are permitted, and sometimes the total number of loans that can be modified is capped (typically at 5% of the pool).

    Additionally, servicers are frequently required to purchase any loans they modify at par (100 cents on the dollar). This functions as an anti-modification provision. Moreover, all PSAs prohibit the servicer from undertaking any action, including many modifications, that would threaten the MBS’s pass-thru tax status.

    In order to direct servicers to engage in large scale loan modification, it is necessary to amend the PSA; a servicer that does not comply with a PSA risks being sued by the SPV and by the MBS holders. PSAs, however, cannot easily be modified. This is to preserve pass-thru tax status for the trust in order to avoid double taxation; to preserve the bankruptcy remoteness of the trust, so that the trust’s assets cannot be seized by creditors of the mortgages’ originators; and to protect the MBS holders from liability for the trust’s actions.
  9. stillhoping

    stillhoping LoanSafe Member

    Davephx - thanks, I actually read that on your other thread. It's good info. I have found my loan in the secinfo and now know the series, so trying to find the PSA reports. WF is the servicer and master servicer, so maybe the reps we spoke to were confused.

    Hell, I'm confused. I'm trying to give myself a crash coarse in banking and investments...something I clearly know not much about.
  10. stillhoping

    stillhoping LoanSafe Member

    Okay - PSA and I feel like a complete idiot because I am having trouble interpreting the meaning in the PSA regarding modifications. Anyone?

    3.1.2. Modifications of Mortgage. With the prior written consent
    of the Master Servicer, the Servicer may modify the terms of a Mortgage Loan
    which is in default or a Mortgage Loan as to which default is reasonably
    foreseeable; provided, however, that (i) such modification may not reduce the
    amount of principal owed under the related Mortgage Note or permanently reduce
    the Mortgage Interest Rate for such Mortgage Loan and (ii) the Servicer and the
    Master Servicer have determined that such modification is likely to increase the
    proceeds of such Mortgage Loan over the amount expected to be collected pursuant
    to foreclosure. Notwithstanding anything to the contrary in this Agreement, the
    Servicer shall not permit any modification of any material term of a Mortgage
    Loan (including the Mortgage Interest Rate, the principal balance, the
    amortization schedule, or any other term affecting the amount or timing of
    payments on the Mortgage Loan) where such modification is not the result of a
    default or as to which default is reasonably foreseeable under the Mortgage Loan
    unless the Master Servicer has consented thereto and the Servicer has received
    an Opinion of Counsel or a ruling from the Internal Revenue Service (at the
    expense of the Servicer or the party making the request of the Servicer to
    modify the Mortgage Loan) to the effect that such modification would not be
    treated as giving rise to a new debt instrument for federal income tax purposes
    or a disposition of the modified Mortgage Loan and that such modification is
    permitted under the REMIC Provisions.

    I feel like it's saying the master service CAN modify, when the loan is in default, yet later says they can't change the principal or interest rate? What the.. Help.
  11. davephx

    davephx LoanSafe Member

    Lets see.

    IF in default can modify except

    Not reduce principal or PERMANENTLY reduce interest rate.

    Provision which is like the FMV test.. .ok assume passes since underwater etc.

    Rest can't do anything baiscally if not in default or reasonably foreseeable.

    UNLESS Master Servicer agrees...and Servicer gets legal opinion... (assume if its a modification it is not a new debt etc so assume this can be ok.

    Seems "CAN" be done as long as the long-term (after HAMP first few years rate reduction) does not exceed the original interest rate.

    Whether "will" or not is the question. But seems in some cases like your it "could" be done!!
  12. stillhoping

    stillhoping LoanSafe Member

    My head is killing me!!! Thanks for reading through it. I keep reading more and more to see if there's any current amendments to the agreement.

    After further research, I studied the one loan they modified in my series. It resets to it's original interest rate in 5 years - not todays rate like HAMP. I guess that's within guidelines.

    It would be MUCH better if they were more forthright with borrowers! At this point, we don't believe a word they say. They should just send us our investor guidelines upon our application, and the pooling agreement (if it's a MBS) highlighting their restrictions. I guess that goes back to them as servicers, cashing in on all the fees associated.

    Ugh! I need to stop. Thanks again. It's been an educational day.
  13. davephx

    davephx LoanSafe Member

    Putting people on trials often in about 10 minutes by phone by a clerk like person that fills in blanks on computer screen is far easier than trying to find out the pooling arrangements that may be different for different pools, etc. That would take the expensive legal dept since these agreements are not exactly in simple English!
  14. stillhoping

    stillhoping LoanSafe Member

    Maybe now since they are putting people on trials in 10 minutes. It took us 10 months to get on a trial. Even then, we were told we were all set for a permanent mod @ 3.93%. The rep even said EVERYTHING was signed off and ready to go, as long as we made our 3 months of payments.

    I'm understanding more each day but people with a hardship expect the bank to work with them. We scurry around trying to get all the necessary info, figure out how to present it, endless hours on the phone, faxing, and all along the guidelines under our loan prohibits a modification. It's just nuts. There has to be a better way.

    Sorry, Dave, just venting. The info you've provided has probably saved me months of anguish and the expense of hiring an attorney. (Which I've been the verge.) I truly appreciate you taking the time to inform us. I am more realistic about the outcome of our situation and our choices more than ever - thanks!
  15. davephx

    davephx LoanSafe Member

    Thanks for comments, yes even when news is bad we want to know what we are dealing with and expectations. If servicers would just do HAMP as it was set up and not screw it up so much,there would be far less stress, wasting so many hours of time, and more mods.
  16. squawkMBS

    squawkMBS LoanSafe Member

    My WFHM is WFMBS. It is not very good loan but it is all I got.

    This is my story: I was going into foreclosure in 2008. I stopped foreclosure by filing Chapter 13 BK. It was successfully discharged in 2011 in Sep.
    Still the Interest rates is high on Mortgage and I wanted to reduce mortgage interest rate by doing Loan modification.
    WHat I was trying to do since January 2012. Finally this week on Monday, 18 Feb 2013, I met face to face with Underwriter-at the NACA event in Washington DC DC ARMORY.The Underwriter audited all documents on my account and file, and finally asked for an Origination Uniform Loan Application.She tried for an hour to break in WF archives to retrieve it in order to move on. -- I passed al lthe checks etc etc So i was told.
    All she needed was Origination Application for Loan.
    I went home, and I found it and I brought it the next morning to the NACA EVENT in DC Armory. They scanned it to my account, and I started again wait for her to speak about it. When I sat down again with my Underwriter Face to Face, She denied to me. She said that I need to show more money for loan modificationfor my particular WF MBS loan. Now I read all the replies about MBS loans, on this forum and I see that my sufferings and level of adrenaline during NACA event was just a wste of time - because they play this game of giving hope and it is like they are playing like CAT and MOUSE.Bait and switch.
    In the end my NACA representative told to me that all together it is a VERY BAD LOAN.
    And I need to refinance and move awau from this WFMBS loan. If I can.
    I was so beaten up after that--I just dont get it, why to keep me hoping and expecting good news at the NACA event, if in the end after 3 days of negotiations with face to face underwriter- they find something like -- this Origination Uniform Application for loan to deny to me now. 7 years later.
    " beaten up sqawk mbs."

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