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Advice on applying for a re-fi or loan modification

A loan application form.

Ever seen how much paperwork is involved in buying a home? And if you find yourself unable to make mortgage payments, things can become even more complicated and confusing. But it's no easy task to clear answers from your mortgage lender. Wouldn't you like some straight talk from a banker? Us too. So we asked Jess Tirado of Wells Fargo Home Mortgage to stop by for a little chat. He's a senior vice president and regional servicing director who lives in the Inland Empire.

What makes an application for a refinance request or a loan modification stand out in the eyes of a bank?

"What we look for is, obviously we want to make sure that the customer is qualified for the mortgage. That we're going to be able to give them a loan that they're going to be able to afford and make the payment on. So in any loan situation what we're looking at is that you have credit, that you have collateral and that you have capacity, meaning that you have income to sustain the loan. We want to make sure that anybody who gets a loan today can service that loan for the time that they have it," says Tirado.

But what about those people seeking loans who are in distress?

"We know that there are people out there that are still struggling with their mortgage payment. We ask all customers as soon as you run into any difficulty, in fact don't even wait, if you know there's going to be a change in your financial situation let us know ahead of time. You don't have to wait until your mortgage is delinquent. A lot of people immediately think they need a modification, it might be a repayment plan. You had a hardship, you're back on your feet now, you just can't get caught up on your payments that you missed, we can work with that. There are different solutions to each financial situation," says Tirado.

Tirado says contacting the bank if, say, you are notified that you're going to lose your job, can possibly improve your chances of getting help. Yet there are countless stories of people saying they are getting the run-around from their bank or going through the process of a loan modification or foreclosure at the same time.

"Years ago when we started in this crisis, there was some confusion. There were some things that we had to work out. As you know, this economic crisis has been unprecedented in our time. So none of us have the luxury of having experience in this. I think what you'll find now is that a lot of that has changed," says Tirado. "We've learned a lot and it just works a lot better for customers now."

For people contemplating a re-fi or loan modification, Tirado advises you to tell the bank your story.

"What is happening in your life? What has changed? Contact your bank early and they can help you work through the options that might be available for you," says Tirado.

About the author

David Lazarus is an American business and consumer columnist for the Los Angeles Times.
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My home loan is privately funded through Bank of America. My bank has done nothing to help me reduce my payments. I am a single, 58 year old widow and special ed teacher whose pay goes up 1/2 cent and back 1 cent kind of deal. In other words, we just don't get pay raises. My savings is shot. I have been screaming for help, even considered going with some legal group in Santa Monica to get it. I just need to reduce my payment. Each paycheck I get, half goes to mortgage. I don't want to lose my house. I like my house. I have no (nada, zero, family to help me). The
Bank of America just runs me around in circles. I am diagnosed Asperger which doesn't mean I am not smart, I have a Master's in Education, but it does mean that I am a bit impulsive and lack understanding of finances. Please help me!!!!

I just listened to you comment on air time while you were speaking to the vice president of wells fargo. Everything he said is somewhat true except the fact that they do not look for the best interest of their customers. I asked for a loan modification starting the month of October got the run around and NO return calls from my home preservation speacilist after emails and phone calls.
Decemeber comes around I finally get a hold of a home speacilist advised her that he was not returning calls. I will leave out names for now. After 2 letters received stating that my home oreservation speacilist was being switched. I finally get a dedicated speacilist. My situtation I had breast cancer and had to have surgeryand the insurance that I have requires that you pay the copayment first before any procedures. After numerous of medical bills and my house payment going up from shortage of escrow. I needed help. I have a family of 7 including my husband we do not spend money or whatever. We both work but got behind and could not afford to get caught back up on the payments. I asked for a motification. The end result which I was notified the end of January. They said per the income provided they could not do the loan modification??? I'm still in the same situtaion I am in due to overdraft fees I had to pay to keep my account open we are basically making pymts to the bank.Wells fargo stated they can set us up with a payment plan and split the 3 months past due in 6 months. Our normal pymt was about 1230.00 with the pre-payment plan our pymt for 6 months will be 2530.27!! That makes no since. If I didn't agree to it they would have proceeded with the foreclosure. Me agreeing to it and if I do not make the payments on time the house will foreclose. It baffles me how they think the payment plans helps me when I was asking for help to begin with. Now I'm hoping I'll get enough money from our taxes to get caught up. Wells fargo is NOT for the clients. Pray for me :(

Whooey.

Wells Fargo has been giving me a run-around for over a year now despite a Federal Court order. They don't give a hoot about home owners. All they care about is squeezing the average person out of the market so they can rack up profits for themselves and their carpet bag investors. Foreclosure is their goal - so they can write off the person and the loan, resell the property to another mega-cash-investor. Helping ordinary people stay in their homes is NOT part of their strategy.

Whatever they are saying publicly is not what they are actually doing. Not even close. Mr. Tirado is delusional. He has no clue what is actually going on at Wells Fargo, no clue at all.

I've been struggling to keep my home - underwater and in arrears now. Wells Fargo has mounted a campaign of intimidation, stalling, and blocking to avoid doing anything. The only option I have had is to seek bankruptcy protection in Federal court.

Every time Wells Fargo asked for documents (15 and counting - just in the past year!!!), I provided all the documents they asked for, to the letter --- for which, by the way, they get paid several hundred dollars by the Federal government (including me!! - a taxpayer) for pretending to process.

Then, they would wait 6 weeks or more, and say they needed another form or an updated signature. I'd give them what they asked for but then they'd say they had to have all new files because the ones they had were outdated. Each time I gave them what they asked for and each time, it wasn't enough. They had to have something else -- something they did not ask for. And every time, they waited at least 6 weeks before asking.

They wanted a different form, they wanted each item on separate pages, they had to have each page formatted just so, they wanted updated account statements, they wanted this and they wanted that. More than once, they sent letters telling me they needed a pile of documents to consider if they could discuss anything with me -- the same week I sent them that very pile of documents per the previous week letter. Then, two weeks later, they wanted the same documents. Seemed they couldn't find what I just sent them.

I spent hours and hours and hours getting them what they wanted. Did I get paid one penny for preparing all those documents? No. But they got paid thousands for collecting those documents. And what did they do? NOTHING. NOTHING AT ALL.

Wells Fargo has disregarded both the spirit and the letter of the law in their complete failure to engage in good faith.

Way back in 2006, when the whole mess started for me, I saw problems coming. I went to the bank and asked for help. They said, "aw, too bad." They offered nothing. No help with a sale, no help with anything. Not even the suggestion of a modification -- even temporary -- that would have let me keep up the payments.

When I scraped together what I had, convinced my clients to pay me weekly for invoices, and took the checks to the bank in person to try to make my payments, the bank refused to cash the checks -- which I was going to use to immediately make my house payment! And told them so! Even asked them to let me make the payment at the teller window right then and there! But they said NO.

They wanted to hold the check for 3 days -- so they could charge me late fees on my house payment! Too bad for you. You should have come in earlier. You are late and that is your problem.

They did not care then and they don't care now. NOTHING HAS CHANGED.

I am a home owner that bought during the market boom. I ended up with a vairable loan! I have tried countless times to refi. I recently did a modification with my mortgage company only to find out that it brought down my finance rate a extremely small amt and added what I was unable to pay back into the mortgage! My payment amount went down about 100.00. This modification only lasts for 6 month. I tried to do a refi and was told that no-one will touch my mortgage due to my modification and the fact that I owe more than my house is worth. What can I possibly do to fix this????

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