Lenders short on answers now, but call back

By Nicole Lucht

Friday, Feb. 20, 2009 | 2 a.m.

Nevada homeowners have been flooding mortgage service centers with calls and questions about the Obama administration’s mortgage relief plan. But answers will have to wait, lenders said Thursday.

Wells Fargo Home Mortgage has experienced an 8 percent to 10 percent increase in call volume since it was first reported that President Barack Obama would announce a housing plan, said Mary Coffin, executive vice president of servicing for the company.

Borrowers calling the service centers are asking questions that include:

• “How soon will you know if you can help me?”

• “When and how should I expect to hear from you?”

• “Can you mark the system to make sure you call me back?”

The answers at this point are not always precise. Wells Fargo is working with the administration to glean as much information as possible about the plan, expected to be released in its final form in early March. The bank wants to be ready to move as soon as the details are announced, Coffin said.

Wells Fargo is the second-largest mortgage lender in Nevada, according to research by In Business Las Vegas, a sister publication of the Las Vegas Sun.

The state’s largest lender, Bank of America, did not respond to calls for comment.

The plan Obama announced Wednesday calls for changes in lending rules to allow the federally controlled mortgage giants Fannie Mae and Freddie Mac to refinance the mortgages of 4 million to 5 million homeowners who have managed to keep up on their loans but are struggling and cannot refinance because their house values have plunged, eating into their equity.

The plan also would infuse $75 billion of federal money directly into the system to help stabilize mortgages of up to 4 million homeowners who are behind on their payments or facing foreclose.

A third element of the plan seeks to increase the credit available for mortgages, granting an additional $200 billion of financial backing to Fannie Mae and Freddie Mac.

Wells Fargo already has placed a moratorium on the sale of its foreclosed properties through March 13. Over the past 18 months the bank has helped 700,000 of its borrowers with modification, repayment plans and short sales in lieu of foreclosures, Coffin said.

While Wells Fargo originates its mortgage loans with homeowners in Nevada, it doesn’t service its loans here. Instead, calls stream to seven call centers in other states.

Many of the callers are in trouble with their mortgages, but many others are not. They are simply seeking to refinance and looking for a better interest rate, Coffin said.

The bank is trying to get details of the plan, Coffin said. “Our desire is to be up and operational, depending on what the details are in March.”

Nevada Bankers Association President Bill Uffelman said he doubts some aspects of the proposed plan would help Nevada homeowners, particularly those trying to refinance a home whose value has fallen so much that they are severely upside-down on the mortgage, meaning the mortgage is vastly greater than the current value of the property.

“Some people in Nevada will benefit but it’s way too early to tell what the numbers are going to be,” he said.

Depending on the details of the plan, homeowners who are upside-down in their home values may not be successful in refinancing, Uffelman and Coffin said.

Home values in Las Vegas are estimated to be down almost 50 percent from two years ago, and more than half of Las Vegas homeowners are underwater on their loans, housing analysts estimate.

While lenders welcome Obama’s plan, they have some concern that homeowners having problems paying their loans won’t talk with their mortgage providers. They may be scared or embarrassed, or they may be waiting to see if they can get a better deal under Obama’s plan, Uffelman said.

“It’s imperative that people talk with their lender,” he said. “If the borrower isn’t having those conversations, all the lender can do is file for foreclosure.”