No More Subordination Agreements on 2nds for Loan Mods!

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
Hello Everyone,

This has been an issue that has been arising for quite some time and it frankly makes no sense why Wells Fargo would require a subordination agreement from the 2nd mortgage holder to complete a loan modification. They are the only lender requiring such actions although a loan modification is simply changing the terms of your original mortgage, not closing on a new mortgage as with a refinance... We have dozens of members here who have ran into this issue and while some second mortgage servicers (such as PNC) have no problem agreeing to sign this sub form, most other servicers will refuse to do so and the modification will ultimately be dropped, leaving foreclosure inevitable...

I have sent out many emails myself questioning this matter and never get a straight answer, and I'm positive many of you here have as well. We need to ban together and send them as many complaints as possible with something like "no more subordination agreements" in the subject line to bring some attention to this matter.. I would not hesitate to contact your state AG and Senator as well, it absolutely makes no sense why they would be the only servicer requiring such a form to complete a loan mod!!

[email protected]
[email protected]; Co-President WFHM

[email protected]; SVP WFHM

[email protected]; VP WFHM

[email protected]; Assistant to Mary Coffin

[email protected]; General Counsel WFHM

[email protected]; Board of Directors, WF

[email protected]; CEO, WellsFargo

[email protected]; EVP and Controller, WellsFargo
 
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Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
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Reactions: sunshine80

LOST&FOUND

LoanSafe Member
Aug 25, 2012
48
1
8
53
Dear Evan:

You are just a God send Angel to all of us. My friend is trying to modify his loan with Wells Fargo. She recently got approved for a trial payment. She has done 2 payments out of 3. Now, just today, she called me telling me this same story, that Wells Fargo is asking for a subordination of her second. Now, the situation with my friend is, she wants to settle the second which is now with National Star Mortgage. The balance is 83K. She offering to settle with 10 K. Wells Fargo sent out an authorization for them to contact the second and to request the subordination. However, my point is, if I tell my friend to go ahead and authorized Wells Fargo to talk to the second, and the second find out that she is trying to modify the first, don't you think they wont' do any settlement with my friend? In turn, they will want more money to settle and at the end, as you says, the final modification won't happen. I am incline to gain more time with the first until she is able to settle with the second. ONce the second accept the settlement, she can send out the release of the lien to the first and then continue with the modification.

Evan, please give me your opinion. There is not too much time on how to proceed. Your advise is always so nice for all this community.
Hugs,
Lost and Found
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
Thank you so much for the gracious words L&F, it's remarks such as this that keep me going and this is what the community is all about - passing information along and paying it forward to others!!

She offering to settle with 10 K. Wells Fargo sent out an authorization for them to contact the second and to request the subordination. However, my point is, if I tell my friend to go ahead and authorized Wells Fargo to talk to the second, and the second find out that she is trying to modify the first, don't you think they wont' do any settlement with my friend? In turn, they will want more money to settle and at the end, as you says, the final modification won't happen. I am incline to gain more time with the first until she is able to settle with the second. ONce the second accept the settlement, she can send out the release of the lien to the first and then continue with the modification.
Unfortunately, the subordination agreement will more than likely be required to finalize the modification on her first mortgage. She cannot put the modification aside and work on a settlement w/o risking being kicked out of the mod, this will take her back to step one and will have to reapply all over again. However, having the 2nd sign a subordination agreement should have no affect on her ability to settle the account at a later time. IMO it would be best to continue with the mod and later work on settling the 2nd mortgage with Nationstar, she should have plenty of time if she is still underwater. You may want to provide her with a link to the "strategy for settling 2nds" thread here: http://www.loansafe.org/forum/debt-settlement/37996-strategy-settling-your-2nd.html
 

LOST&FOUND

LoanSafe Member
Aug 25, 2012
48
1
8
53
So Evan, is the first the one who is going to ask for the subordination agreement? or if my friend who has to requested? and What happen if the second does not want to subordinate?, My idea is if this happen, then my friend will settle and they will release the lien. So the first won't need the subordination of the second... Am I right? please comment
 

DHart

LoanSafe Member
Oct 4, 2013
7
0
0
I am also being run around for WF getting subordinations. Its really a deal killer if you cannot get it, which I suspect WF wants to deny the HAMP (I can't figure out why yet) My understanding is that the lien position for WF (1st mortgage) will not change with the new terms of modification. If it was a HARP refinance then I would understand but not for a modification and they never asked for it until AFTER I made the 3rd TPP so now I've paid 4 TPP payments, been getting the run around since Jan.2, 2013. At that time I called about refinancing but was redirected to modification instead. What a bunch of stupid paperwork it has been, anything and everything, ONE item at a time. What do you know about these subordinations on a modification? Is it legitimate or am I being run around to buy them more time? and more time for what? why are they so reluctant?
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
So Evan, is the first the one who is going to ask for the subordination agreement? or if my friend who has to requested? and What happen if the second does not want to subordinate?, My idea is if this happen, then my friend will settle and they will release the lien. So the first won't need the subordination of the second... Am I right? please comment
I apologize I didn't see your response here L&F and I'm sure your friend has already determined the outcome. The first mortgage is going to request the subordination agreement (ONLY WF requests this) and this would not be required if the second was settled prior to completing the modification. I started this thread in April because a subordination agreement should NOT be required to complete a modification, yet WF continues to request this and wrongfully deny homeowners assistance. If the 2nd doesn't agree to subordinate, it's likely they will void the agreement..
 

gatorauto

LoanSafe Member
Jan 20, 2013
18
0
0
After three years, I finally got my modification!!!! I had an issue with a subordination during my HAMP trial last year. I eventually got denied. My 2nd lien holder did not understand the need for a subordination in the first place. This time around I was told by the presidents office at Wells Fargo "as of August 2013, we no longer need subordination agreements for a 2nd lien with a balance under $20k. I hope that helps someone out there going through the same problems as me. Good luck everyone! Keep fighting and do not take no for an answer!!
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
gatorauto

Thanks for posting that announcement by WF. But how many borrowers have a 2nd as small as $20K?

IMO, there's been virtually no change in WF's policy.
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
Thanks for sharing your success story Gatorauto! It's nice to see someone was able to get around the subordination agreement! Wells Fargo needs to extend this policy to ALL junior liens, regardless of the balance!

Would you mind sharing your story in this section as well:toung:

Success Stories - Homeowners Who Fought Back & Won
 

DHart

LoanSafe Member
Oct 4, 2013
7
0
0
I have to ask.... During that 3 year period, were your payments applied to your mortgage? My statements do not reflect the 4 TPP payments! Nor were those payments reported to credit reporting bureaus, rather I am being reported as 6 months late -on going, so next month will reflect 7 mos late, etc. even though I am making TPPs on time and in full. (I became 2 payments behind during the first modification attempt, which was denied) I am not willing to sit around for three years waiting on WF to do their jobs. I have never dealt with such incompetence and disregard for a customer base from a business before in my life, short of Time Warner cable, but that story is for another forum. I knew something was WAY wrong w WF when I was told it takes 10 days to send out an Overnight letter, and 9+ days for a FAX to get to the correct department. They really need to get their stuff together.
 

MTJen

LoanSafe Member
Feb 6, 2015
6
0
1
41
gatorauto

Thanks for posting that announcement by WF. But how many borrowers have a 2nd as small as $20K?

Tom,

I have a second with a balance of 19k and they said no to subordination, literally out of spite. Small town bank. Wells Fargo was AMAZING to work with and this small town bank basically flipped me the bird when I asked them. The Wells balance is 295k, and currently in 1st position. The HELOC is in 2nd position with a balance of 19k. We were discharged in a chapter 7, and didn't make payments on either for 3 years. We were offered a loan mod from Wells, and then the HELOC bank basically said "not gonna happen, we would rather get NOTHING than stay in 2nd position". I can't for the life of me understand that :(
 

MTJen

LoanSafe Member
Feb 6, 2015
6
0
1
41
DHart

Thanks for your post.

The communication times that a WF rep told you are laughable
I agree, that is laughable. I LOVE my Wells loan specialist, I mean, we have agreed that if he ever comes to Montana, we are getting drinks! Great, great guy. I trust him completely to tell me the truth. He has told me that when I send a fax, it takes 48 hours for it to be processed and show up on his computer screen. And, it has never taken longer. Mail sent THERE is slow as molasses, though. It has to make it through the mail people, then goes to the data entry folks and is then scanned so it can be uploaded to your LS's computer.

I know mail doesn't go to your specialist's desk, they have a specific address (they have desk numbers and a different address from where paperwork goes). Not sure they are supposed to give it out. I told my specialist I wanted to send him a card and we get along well, so he hooked me up with his desk address. It is REALLY different from the one you send docs to. So, I can see how mail can take forever and a day to get to them that route.