Wells Fargo to assist borrowers facing foreclosure

The San Francisco Chronicle reports:

Wells Fargo & Co., the nation's second-largest mortgage lender, will help borrowers struggling to make payments and, in some cases, will change loan terms rather than foreclose on properties, the company's chief executive said Friday.

"We try very hard to keep those customers in those homes," CEO John Stumpf said in an interview with Chronicle reporters and editors.

"We are taking proactive steps. ... If you have a mortgage, and you belive you're going to have a problem ... call your mortgage banker. ...We can work with (borrowers) in many, many cases."

Modifying loan terms - for example, by permanently reducing interest rates - is one of several steps San Francisco's Wells would consider if a borrower can't make payments. Alternatives might be refinancing the loan or postponing one or more payments.

The bank makes decisions to change loan terms on a case-by-case basis. If a mortgage has been sold to outside investors, the bank must get their agreement to rewrite terms, Stumpf noted.

In 2006, Wells Fargo made $27.9 billion in subprime mortgages, loans to borrowers who couldn't meet credit standards for traditional mortgages, according to Inside Mortgage Finance, a trade publication.

Berkshire Hathaway's Wells Fargo.