Wells Fargo Home Mortgage Bait & Switch Loan Modification w/3 Month Trial Payments & No Permanent Modification Option Internet, California

Wells Fargo Home Mortgage called us on New Years Eve, two weeks after our 3rd payment in our "3 month trial modification" period, to notify us that our loan was a "mortgage backed security loan" and not eligible for a "permanent" loan modification. They said that this investor may "consider" doing a 5 year modification, but would require us to give them $62,000 up front and our payment would be increasing by over $2,000 per month over the "trial" payment. This was after months of phone calls, repeated submission of documents and their false statements that if we did our part, making the 3 monthly payments on-time, which we did, they would submit our loan for a permanent modification.

We feel completely misled, since they obviously knew what type of loan we had when they entered into the 3 month agreement with us. They failed to mention any of this information upfront and we relied on their statements in good faith and fulfilled our part of the agreement. It wasn't until after they received our 3 payments that they notified us of their inability to grant us a permanent loan modification. We expect to receive a certified letter in the next few days with the details of their "5 year" offer. The representative said we could "counter the offer" but we are not hopeful this will work out in our benefit.

To provide a little history,in 2006 we tried to sell this home, unsuccessfully, for over a year, because our income had dropped by 50% and we couldn't afford the current payment and taxes. As a last resort, in 2007, we rented it at a negative loss each month, hoping the market would bounce back and then we could at least sell it for our loan amount in a couple of years. During the real estate market crash between2008-2009, we contacted Wells Fargo again to ask for assistance in reducing our interest rate and/or payment and they informed us they could not assist us and would not even accept a "partial" payment because they were not set up to do so.

When we stopped making our payments, we let the tenants live there for free for several months so we could have the home's condition stay intact while we pursued a short sale. We decided to short sell the home since we were so under water and could no longer afford the high payments. The short sale process took about a year. During the course of this year, we had 4 short sale approvals, with different buyers. Each time we lost a buyer, due to the extended delay on Wells Fargo's part to issue an approval, we had to start the process over and submit the endless amount of paperwork they require. Between the first approval and the second approval, Wells Fargo increased their "approved" price by $100,000! This was in a declining market, but because inventory was so low, we secured another buyer at that price.

Then Wells took another few months to issue that buyer's approval and they had moved on to another property. The 3rd approval was for the same higher price (we lost that buyer too) and then finally the 4th approval came in. The buyer was all cash and was willing to give additional money to the 2nd lien holder, above the amount that Wells would receive on the 1st. After a year of our realtor negotiating and doing quadruple the amount of work since we had to go through 4 approvals, Wells "investor" said they would not approve any money going to the 2nd, even though it was above and beyond their higher approval amount. Because the 2nd lien holder would not release the lien without this money, we were unable to short sell the home.

We contacted Wells Fargo to inquire about any other alternatives to foreclosure and they suggested a loan modification. We submitted all the required documents and were informed approx. 45 days later that we were approved for a "trial" modification, which could be converted to a "permanent" modification after we proved we could make the 3 monthly payments they calculated, based on what they felt was "affordable" with our financial information. One caveat, it had to be owner occupied and we had to move back into the home in order to secure this modification. We went to great expense, including breaking our lease and finding a replacement tenant, rehabilitation expense of this property since it was neglected by previous tenants, including an algae filled pool, pet damage on all the carpeting and the expense of moving our family.

We did this in good faith, trusting that if we lived up to our end of the agreement, Wells would do the same. We informed Wells several times including in our hardship letter, before we moved back in, that we would be going to great expense and adding a tremendous amount of stress in our lives to move back into this home. Not once did any of their representatives mention that this loan was with an investor that did not allow "permanent" modifications. Had they done so, we would have rejected their "temporary" modification and stayed in the home we had a two year lease on and have security for our four children. Now we have no security whatsoever. Our home will foreclose soon unless we can figure out a way to stop it.

Wells Fargo knew up front our financial situation and hardship and knowingly set us up for failure with their "trial" modification, by setting us up on a payment we could barely afford and then after we uprooted our family and got settled back into this home, they pulled the rug out from under us, asking us for money they know we don't have (they have our bank statements) and by increasing our payment beyond what we can afford. We feel completely betrayed by Wells Fargo Home Mortgageand hope there are others out there like us, in California,who are interested in forming a class action against Wells Fargo. Or there may already be one formed and if so, we are interested in joining.

A word of advice, please do not trust what the representatives from Wells Fargo Home Mortgage tell you over the phone. They are debt collectors and will tell you whatever they are instructed to, in order to collect money from you. We hope that no one else is put into the situation that we are now in.

We know this is a long story but we hope it helps others out there like us. We need to all stick together and stop Wells Fargo Home Mortgage from taking away the security of homeownership from responsible homeowners, whose only mistake was to trust a company who has no concern for keeping families in their homes.