Wells Fargo mortgage modifications fall in April, as thousands slip out of US program

Wells Fargo April mortgage modifications decline

DES MOINES, Iowa — Wells Fargo & Co. on Monday said the number of mortgages it had modified or placed in active trial through its own programs and the federal government’s foreclosure-prevention program fell 3.5 percent in April.

As if April 30, the bank had 505,059 active trial and completed modifications in place, down from 523,336 at the end of March.

The decline reflected a decrease in the number of trials under the government’s home affordable modification program. There were 111,416 mortgages in that program on April 30, compared with 144,932 on March 31.

The April figure includes 36,094 permanent modifications, up from 30,014 in March.

The remaining mortgages dropped out of trials because the homeowners didn’t qualify for the program in some way, said Wells Fargo spokesman Tom Goyda.

Of those, about 60 percent are expected to find another modification program. About 30 percent are expected to be foreclosed, and about 10 percent will pay off their mortgages through other means, including short sales, Goyda said.

The bank’s numbers reflect nationwide figures released Monday, that show the number of homeowners dropping out of the Obama administration’s main mortgage assistance plan is growing, and is now almost equal to the number who have received permanent relief.

The Treasury Department said Monday more than 299,000 homeowners had received permanent loan modifications as of last month, about 25 percent of the 1.2 million who started the program since its March 2009 launch.

To complete the program, borrowers must make at least three payments on time. About 277,000 homeowners, or 23 percent of those enrolled, had dropped out during this trial phase by the end of April. That was up from about 155,000 a month earlier.

Wells Fargo said about 390,000 trial and completed modifications were under its own programs.

The San Francisco-based bank said it started or completed three modifications for every one foreclosure sale on owner-occupied properties from October 2009 through April.

Wells Fargo shares lost 7 cents to $31.97.