Pleading in person for homes

Doug Hayes has spent months in loan modification purgatory without a resolution. So he figured it was worth the hourlong drive from Big Lake to St. Paul on Wednesday to try to save the only home his son and daughter have ever known.

Hayes is one of nearly 400 Wells Fargo and Wachovia customers who made appointments at the Wells Fargo Homeownership Preservation Workshop, a two-day event designed to give face-to-face assistance to struggling homeowners.

About 100 Wells Fargo loan modification specialists will be at St. Paul's RiverCentre on Thursday as well, ready to meet with walk-ins as well as those who scheduled appointments.

Homeowners or real estate investors, current or months behind, "we encourage customers to attend who are experiencing payment challenges," said Joe Ohayon, Wells Fargo's senior vice president of default and retention operations.

Criticism in recent months about the number of permanent modifications being put in place by the nation's lenders along with concern about rising mortgage delinquencies have lenders ramping up their efforts to keep people in their homes.

This is the fifth multiday workshop that Wells Fargo has put on since September. About half of the 6,300 homeowners in Phoenix, Chicago, Atlanta and Baltimore received a workout option either the day of the workshop or shortly after, according to the bank.

Wells Fargo sent out 4,000 letters to Twin Cities-area homeowners like Hayes, who are at least 60 days behind on their payments. Ohayon expects about half of the 800 or so homeowners anticipated at the event to walk away with a solution. The bank came to Minnesota, a state with a relatively healthy housing market compared with states such as Michigan, Florida and Nevada, because "it's an important market for us," Ohayon said. "We have a number of our employees who are in this market." Events are scheduled in Los Angeles and Oakland, Calif., as well as Miami later this year.

In the large ballroom, dozens of makeshift cubicles surrounded a couple of waiting areas. In one, a young boy colored a picture of a Wells Fargo stagecoach while a couple killed time watching the Steve Martin version of "Father of the Bride" projected on a movie screen.

Across the room, about three dozen individuals ate free popcorn and drank lemonade as they tapped along to music videos of Sheryl Crow, Kelly Clarkson and John Mayer. An educational video about the loan modification process also played.

"If you've just missed a payment, there's still hope," said a soft-spoken man on the screen. "Communication is key."

But Ohayon and housing experts say the key is income. Workouts are rare without income to make payments.

"The biggest challenge we have right now is unemployment and underemployment. Until we see improvement in those particular areas, the number of customers facing payment challenges will continue to be there," Ohayon said.

Not so on Wednesday. He walked out of the event with a loan modification through the Home Affordable Modification Program (HAMP), which reduced his payment by about $200 a month.

"What we've been working on since midsummer got resolved here in less than an hour," he said.

He was told to expect the details of his modification by Friday.

An improving record

In the past year, Wells Fargo had been criticized for not doing enough to reach troubled homeowners. But as of Jan. 31, 38 percent of homeowners who are 60 days delinquent and eligible for a modification had a trial or permanent modification in place. Wells Fargo rates sixth out of 22 servicers for the number of modifications, according to data released Wednesday by the HAMP program.

The bank defends its record, noting in the past four months, it has initiated three mortgage modifications for every foreclosure proceeding. It completed more than 350,000 non-HAMP modifications last year.

In Minnesota, there were 17,943 HAMP loan modifications through the end of January. Of those, just 2,584 were permanent modifications.

Wells Fargo didn't allow reporters to witness the loan modification process, citing privacy concerns. But Kanetha Milo, a loan adjuster specialist from Fort Mill, S.C., who has worked at each of the five workshops, was allowed to give an account of her day.

By 1:30 she had met with six homeowners and was able to arrange a forbearance plan for one individual and loan modifications for three. She sent the other two borrowers, who are not behind on payments, into a second review process. Milo is allowed to make decisions only on loans that are 60 days past due, she explained.

Ohayon said Wells Fargo's primary goal is to keep homeowners in their property. If they can't make a loan affordable, or there isn't enough income to make a modification work, a payment moratorium is considered. If staying in the home is impossible, "liquidation" options such as a short sale (when a home is sold for less than the mortgage on the property) or a deed in lieu of foreclosure (when a homeowner transfers the title to the lender, who cancels the loan) are possible.

Matson can't refinance his adjustable rate mortgage because he owes more on the mortgage than the home could be sold for. He's hoping that the bank will work with him anyway. If not, "they can have it," he says of the starter home he had hoped to sell by now.

He stayed late into the evening but had been turned down for modifications on two separate loans, he said. "Not good," he mumbled, as he waited for an answer on a refinance.

Kara McGuire • 612-673-7293