Homeowners in eight states who opted to take out option arms during the mortgage boom are going to get some help from Wells Fargo, thanks to a settlement announced today.
The San Francisco-based bank and mortgage lender will provide across-the-board forgiveness of accrued interest and late fees for eligible delinquent borrowers who occupy their homes, while contributing $24 million to the affected states to fund customer outreach.
Additionally, the company will launch a loan modification program on December 18 aimed at making mortgage payments more affordable via principal reductions, loan extensions, slashed interest rates, and principal forbearance.
The program, which extends to June 30, 2013, will reward borrowers who remain current on their modified payments over three years by earning them additional principal forgiveness.
However, those who already received loan modifications will not be eligible for the new program.
If you’re a Wells Fargo customer who originally took out an option arm through Wachovia, Golden West, or World Savings, you can call 888-565-1422 for more assistance.
Since August 2010, Wachovia Pick-a-Pay customers have already received nearly $3.4 billion in principal forgiveness.
The settlement is part an agreement with Attorney Generals in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington.