As a result of settlements reached by the Attorney General's Office, help is available for Washington residents who obtained problematic mortgages from certain lenders:
Wells Fargo/Wachovia/Golden West/World Savings Bank Settlement
In October 2010, Washington and seven other states reached a settlement with Wells Fargo Bank that provides loan modifications for residents in their states who obtained problematic mortgages from Wachovia Bank and Golden West Corp., which did business as World Savings Bank.
The agreement provides loan modifications for borrowers who received "Pick-A-Pay" option adjustable-rate morgages through Wachovia or through Golden West Corp., which did business as World Savings Bank. It does NOT apply to other mortgages obtained from Wells Fargo.
The agreement provides that between Dec.1, 2010, and June 30, 2013, Wells Fargo will offer modifications to qualified borrowers who are either 60 days delinquent or facing imminent default. Borrowers will first be considered for the federal Home Affordable Modification Program (HAMP). If the borrower cannot qualify under HAMP or elects not to accept a HAMP modification, Wells Fargo will consider the borrower for its new modification program, known as MAP2R.
Modified loan terms will vary according to the circumstances of the borrower but can include principal forgiveness, loan extension, interest rate reduction and principal forbearance (which gives the borrower additional time to pay off the loan principal). Borrowers who remain current on their modified payments over three years will be able to earn additional principal forgiveness. Borrowers who qualify may also convert into a fixed-rate loan.
Under the agreement, Wells Fargo also makes a number of substantial servicing commitments for borrowers with pay option loans These include:
- Ensuring adequately staffed help lines to serve consumers, including those who speak Spanish.
- Providing a single, primary point of contact to assist borrowers seeking modifications under the states’ agreement.
- Making decisions on modifications within 30 days of receiving a complete application.
- Establishing a formal second look or appeal process for borrowers who are turned down for a modification.
- Offering other foreclosure alternatives, including short sale, deed-in-lieu and relocation assistance.
Wells Fargo customers who originally took out mortgages through Wachovia or Golden West/World Savings Bank can call 1-888-565-1422 for more information about the program.
Foreclosure Relief: The settlement also includes $1.6 million for a foreclosure relief fund to be paid to the Washington Attorney General’s Office. The money could be used to provide refunds to individuals who lost homes or to assist with the state’s efforts to prevent or mitigate foreclosures. That has yet to be determined.
Bank of America/Countrywide Settlement
In October 2008, the Attorney General's Office settled an action against Countrywide for loan practices that pushed many Washington borrowers into or to the brink of foreclosure. A significant part of that settlement is aimed at modifying many Washington loans in order that homeowners can avoid foreclosure. The settlement also provided money for borrowers who lost their homes and to fund local foreclosure prevention programs.
Where to get help:
- For information about payments for Countrywide borrowers who lost homes, visit www.countrywidesettlementinfo.com or call the settlement administrator, Rust Consulting, toll-free at 1-866-411-6987 (hearing impaired call 1-866-494-8397).
- If you are having difficulty making payments on your qualifying Countrywide loan, see the Nationwide Homeownership Retention Program or call Bank of America at 1-800-669-6607.
- If you need additional resources, please contact the Washington State Homeownership Hotline, 1-877-894-HOME.
Bank of America enhanced the Nationwide Homeownership Retention Program for Countrywide customers that it launched in 2008 and extended the program until Dec. 31, 2012.
Modifications will provide more affordable payments using a combination of reduced interest rates, term extensions and principal forgiveness of forbearance.
Bank of America Home Loans will contact eligible customers. If you hold a Countrywide mortgage, you can find more information about whether or not you might be eligible for relief through this settlement at www.bankofamerica.com/homeloanhelp. Customers who fit these four criteria are eligible for relief:
- Hold a Countrywide-originated mortgage loan, secured by owner-occupied property.
- First loan payment was due between 1/21/04 and 12/31/07.
- Loan has been foreclosured or was more more than 120 days deliquent on 10/8/08.
- Made six or fewer payments over the life of the loan.
Foreclosure relief and relocation assistance:
More than $925,000 in restitution was distributed among Washington residents who lost their homes. Checks were mailed Feb. 12, 2010, to 491 Washington residents, who each received $1,884 to help offset the origination fees and other costs they paid when they applied for their Countrywide loans. In addition, Washington residents have received approximately $635,000 in relocation assistance.
The Attorney General's Office granted nearly $600,000 of the settlement payment to the Washington State Housing Finance Commission to distribute among qualified housing counselors in Washington to provide one-on-one counseling for up to 2,300 homeowners. The grant will also fund 100 statewide Homebuyer Education seminars. The funds will enable the state to continue providing services available through the Washington State Homeownership Hotline, 1-877-894-HOME.
An additional $320,000 is going to the Washington State Bar Association to fund the Home Foreclosure Legal Aid Project, which provides free legal services to homeowners facing foreclosure.
And $10,000 has been allocated for data analysis to assist the State Foreclosure Prevention Working Group. This multistate group of attorneys general and financial regulators collects loan data from non-federal servicers and publishes reports on the effectiveness of loan modification efforts.
Additional settlement history:
- Ameriquest: The office took a leading role in a $325 million nationwide settlement with Ameriquest in 2006. The case involved allegations of widespread mortgage fraud.
- Household International: The office took a leading role in a $484 million nationwide settlement with Household International in 2002. The case involved allegations of widespread mortgage fraud.
- The Attorney General’s Consumer Protection Division has brought civil suits against several businesses and individuals that promised to help save homes from foreclosure (for a fee) but then failed to do so.