Wells Fargo and Bank of America Step Up Mortgage Modifications

Wells Fargo (NYSE: WFC) and Bank of America (NYSE:BAC) have stepped up their loan modification efforts just one month after being accused of helping almost no borrowers. In total, lenders nationwide have now provided 360,000 modifications to homeowners.

The federal government’s $75 billion mortgage relief program got a major boost when Bank of America Corp. and Wells Fargo & Co significantly ramped up their efforts to modify home mortgages during the month of August.

According to a monthly report from the Treasury Department, Bank of America more than doubled the number of loan modifications compared to the month of July, totaling almost 60,000 modifications for the month of August. Wells Fargo was able to increase the number of modifications that it offered by nearly 65% to just over 33,000 modifications. These two banks have helped speed up the Obama’s Administration mortgage relief program to a total of 360,000 modifications.

Many have argued that the Obama administration’s Home Affordability Mortgage Program (HAMP) has not been able to help homeowners quickly enough. The administration had set a goal of modifying more than 500,000 mortgages by November 1^st, but it appear that number may fall short.

In a recent Los Angeles Times Article, Rep. Barney Frank (D-MA), chairman of the House Financial Services Committee, stated “I am disappointed at the pace of this program.” Frank has not been the only one critical of the sluggishness of the program. Several homeowner advocacy and consumer advocacy groups have also been critical of the program’s handling.

In a report to the U.S. House on Wednesday, Michael Barr, assistant Treasury secretary for financial institutions stated, “There are signs the plan is working but we can do better.” Barr continued, “For the first time, last month we were able to see data on which companies were helping families avoid foreclosure and which companies were not.”

Currently there are about 4 million homeowners that have mortgage which would qualify for adjustment under the administration’s mortgage relief program, but only about 1 in 5 eligible have been able to get their mortgages modified.

Loan servicers, such as BofA, Wells Fargo and others have stated that slowdowns were caused by the need to increase staffing in their loan servicing departments. Banks have also criticized the government for delays in regards to distributing information about the program.