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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This is completely false information from Wells Fargo. I deal with these lenders daily since I process for loan modifications. Wells Fargo is by far the worst lender to work with. They push value, calculate income incorrectly, and deny homeowners incorrectly. WF recently ran NPV (net present value) for my client back in April, 2013 and had the value and had the value at $560,000 on the NPV inputs, then in August, 2013 the new NPV inputs showed value at $630,000...really a $70,000 value increase in 4 months. I don't think so! They are saying my client is now under 80% loan to value (LTV) because of the increased value and doesn't qualify for a loan modification. Unbelievable!!! I also had another WF file where the underwriter went off of the 2012 tax returns for self employment income versus the profit and loss along with bank statements we had to provide in order to prove the self employment income...by them going off of the tax returns, this showed a much lower income and they were denied. It's ridiculous what WF does and they truly do not want to help homeowners, or at least it appears that way. I continue to fight for my clients and do what I can to get a favorable decision for my clients, however sometimes I am up against a wall when it comes to working with WF and having to over come so many road blocks. I wish any one who is trying to get a loan modification with WF GOOD LUCK! If I can be any assistance to any one or share my knowledge and experiences to help your situation, please don't hesitate to ask.

Thank you tziegler9 for your insight. You are so correct when you speak of the roadblocks within the WF MACHINE ! What BS ! I suffered a seizure and major stroke in Jan 2013, due to a doctor's gross error during a procedure, prior to brain surgery. I have been unable to work since then, and am now on long-term disability. I was supposed to be returning to full time work in Feb of 2013. During the entire year of 2013, I was so disabled from the brain injury, that I could barely walk or function (physically or mentally). During the entire year, with the help of friends and neighbors, I sent requested paperwork to WF on 3 separate occasions, in hopes of getting a modification. I was finally told in Dec. 2013, that I was denied because I had had two previous mods. On three occasions, I asked for verification of same and to date I have yet to receive any proof. I told them I only had one in 2009, when I lost my job. I went to see a HUD person in Dec. 2013, and what a joke that was! Absolutely no help and a waste of my precious time and energy. If you can offer any facts or advice, it would be greatly appreciated. I sit here now not knowing what/where to turn.

This was a very frustrating story to listen to. I do not feel it accurately reflects the experience that most homeowners have gone through. It has been my experience that the bank will not answer your requests until you are three months overdue. We have been jumping through hoops trying to get a refi, then loan mod, and finally a short sale for over three years. We have filled out form after form and every time we are close another roadblock has been placed in front of us and we scramble to make it over. We have had several potential buyers, whose bids were approved by the bank, but then the paperwork begins and never ends. Another signature, another form, fill out the form again, resend the form. It isn't just our family that is dragged through this time eating black hole of our paperwork. Our relator has lost hundreds of hours resending and refilling out forms. In the end the bank always seems to find a way not to work with us. Excuses that no one thinks are logical or make sense. If they never intended to give us the short sale I wish they would have made that clear in the beginning instead of having us chase a ghost for three years. Now we have no idea what is going on with our home. We have been told we are being foreclosed on, but we cannot find it listed on the trustee sale website and the bank has no answers. What I do not understand is why the bank treats people this. Why set their customers on this endless chase when they never intended to work with them?

Tirado is either out-of-touch or trying to manipulate public opinion. We have done exactly what he advises (called Wells Fargo in advance of certain default) and they have done absolutely nothing except start the run-around and request mountains of paper, which they then say they never received. They even outright told us they would do nothing until we are delinquent on our payments, which not only begins to wreck your credit score, but puts you on the path to foreclosure or bankruptcy. So what is he talking about? And when will the Government begin to take notice of this widespread and debilitating problem?? The PEOPLE need protection here and a hand in keeping banks honest.

Wow, is this guy just outright lying or is his advice only for friends and family? I did what he suggested this morning and called my Wells banker to tell them we are down to one income after my husband's job was "eliminated" and I'm TOTALLY getting the run around: wrong phone numbers, no one knows what department I'm talking about - anyone out there ever heard of "Hope for Homeowners?" - long waits on hold and finally I was sent to some counseling agency not connected to Wells at all. I think Wells Fargo's "Hope" is that homeowners get so frustrated they just go away. Awful, awful. awful...

Unfortunately this is Bull Shit in the highest degree. I have a Wells Fargo Mortage and a Wells Fargo Equity Line. No late payments on anything in 20 years and Fica scores in the 780 range. I wished to refinance my mortgage and equity line which would reduce my payments by $500.00 a month. I was told by the Branch Manger at Wells Fargo - it would be better if I walked from the home as I do not qualify for some 26% rule so they can resell the mortgage so they will not refinance. I am currently complaining to Congress, writing to President, CEO of Wells and consumer services against banks and lending practices. Wells Fargo working it out - they recommended that I walk - which would lose the equity in my home but they would not refinance. I have no other debt. The appraisal is $60,000.00 more than the mortgage and equity line combined.

I call BS on the recent interview with Jess Tirado. He doesn't sound like he's in touch with the reality I've seen.
I know someone who works for their modification department, and the scene of chaos and lack of support they describe is truly unbelievable. No space or training for new employees, people sitting around at tables drinking coffee and texting, meetings expected with no notice, and screaming at those who don't get it despite no connectivity because no space/desk/computer, new hires learning by looking over the shoulders of overworked colleagues, high quotas and low resources. Very little education as in how to do the job. They tend to hire out of work real estate agents (there are many!).

Let me describe our experience:

FOUR failed attempts to refinance Wells Fargo FHA loan:
First attempt: Wells Fargo "lowballs" home value at 250K (<1 yr later appraised at 285K).
Second attempt: Conventional refi fails due to partially disabled veteran, retiring Federal employee husband not receiving retirement pay for 1 full year post retirement.

Third attempt: FHA streamline fails due to husband's ex-wife breaking agreement to not claim his retirement for alimony, obtained judgement of 3K against him. We do not miss a mortgage payment.
Wells Fargo misclassifies the judgement as a lien against the property (these things are very different, but I did not find this out until I got over the shock and depression and looked over the papers in preparation to contacting the Consumer Financial Protection Bureau) and turns down the streamline.

We then accrued 12K of legal bills dealing with the ex's claim and subsequent appeal, which we had to put on a credit card. I have since accessed an account to pay for this, further cleaning out our savings (which as a self-employed person I MUST have 1 year's income saved- which we now have only because my father was a victim of a tractor-trailer accident in 2011 and had some life insurance).

Fourth attempt: HAMP/HARP program with Wells Fargo. Told first that I do not make enough to afford the modified payment (despite having made payments of 67% of my income before bills, for over a year), then told that I made too much, and they even told me not to pursue the program because it is so bad (an employee said this to me on the phone).

At one point I am told that having a mortgage payment that is 47% of my income is "affordable" and "not so bad".
We can't rebuild our savings, my late 50s (skilled PR professional!) partially disabled (waiting on the 1-yr plus VA disablity re-evaluation program) husband is looking for a job and may have to move temporarily to another state to get meaningful employment.

I am self-employed in allied health services, and my income varies by client load per month. If I have a bad month, we scrape around in the bottom of the freezer and hope our 10-year-old car doesn't need any more repairs than it has already needed. We got a new starter and rear brakes for Christmas. Readers know what I am talking about.

At this point, I turned to the Consumer Financial Protection Bureau and filed a complaint.

The first round of this complaint was handled by their Executive Office of Complaints, and the first person we contacted seemed to have the job of saying NO. That was when I really looked at what is really meant by property lien versus judgement. They are very different things under the law.

I realized that WF had made a mistake, and filed a multiple copies of my rebuttal, from the President to the executive of mortgage and finance, and the CFPB.

We have a different point of contact now, who told us she would be talking to some underwriters.. the problem is that our credit rating has been wrecked by over 100 points since all this started. I went from about 850 to low 700s. And none of this has been my fault.

This is primarily a problem of enforcement and goal-setting on the part of regulatory agencies. Businesses meet the needs of the structure they exist in, and take as many advantages as they can to gain profits.

People like the folks at the Consumer Financial Protection Bureau, who hold businesses to the standards of honesty, humanity, and decency. Even Jesus became enraged at the money-lenders, kicked over tables and wreaked havoc at the temple.

Meanwhile, I encourage people to contact the Consumer Financial Protection Bureau:

These people know how to get the attention of a business. Contribute to them, if you can.. they may save the economy yet.

With Respect,

ED Gordon
MidAtlantic USA

this report left me furious. We rent a townhouse in MA. Our landlord had paid almost $100,000 more for it than it was worth in 2011. His mortgage was with Wells Fargo. We were notified that he was working on a short sale, and had a buyer who wanted to continue to rent to us. We were not aware that he had stopped making payments on the townhouse, and so Wells Fargo was working on both a short sale and a foreclosure. The buyer's offer: $174,000. One day, the landlord called us and said we should start looking for a new place to live because the house was to be auctioned off the following week. I advised him to go straight to the top and call the Well's Fargo president's office to forestall the foreclosure. No go. The wheels were in motion, foreclosure didn't communicate with short sale, and, as we sat drinking our coffee at 9 a.m. on Patriot's Day, the place was auctioned off: for $131,000. Tell me if that makes any sense? Heck, we would have bid on the place at that price! I think the guy you interviewed is full of you-know-what. Wells Fargo no more has this situation under control than any of the big mortgage issuers do or did. We were fortunate. We are renting by choice and had the means to move, if necessary (buyer ended up renting to us). Our previous landlord quickly sent us our last month's rent and security deposit. What about renters who experience this, must move and lack the resources to do so, especially when they are unlikely to recoup their security deposits? And tell me how Wells Fargo has suffered for its unethical, robo-calling behavior?


My husband and I purchased our home in 2007 with a cash 20% down payment, We were a dual-income family and newly adoptive parents of a fabulous three-year old from foster care. In 2008 we adopted another child, this time from Ethiopia. In 2009, while my husband was in Iraq, I lost my job and we became a single-income family. At the same time, the market value of our home tanked taking with it ALL of our cash. My unemployment benefits helped us keep afloat for a while, but not for long. At the same time I went through serious health problems that are continuing to drain our cash. In 2009 we tried to apply and were denied even the PROCESS of beginning a load modification. Since that time, we've used withdrawals from my 401k retirement savings to hold onto our house with the accompanying 30+% tax penalties. I have $50k left in a high-penalty annuity left, and that's it. We've now gone through a large percentage of my husband's retirement account (with accompanying tax penalties).

We are happy, nonetheless, as our kids have found the stability that will ground them for a lifetime and we are all relatively healthy. But my husband and I are now 55 and 54 with nearly depleted retirement accounts, have no cash, no equity in our home, and are living paycheck to paycheck. At 54, I am competing against people 15 years my junior to return to the job market with no luck.

Mr. Tirado presented a scenario for homeowners to contact their banks early when facing financial distress. What about the thousands of people like our family that have been struggling since 2009 and are on the cusp of losing our homes?

We all know that banks exist to make money. For Marketplace to allow Mr. Tirado on the show, with his air of aristocratic benevolence, is a slap in the face to all the families that have been listening to Marketplace for years as a source of problem-solving solutions. We KNOW that there has been "confusion" on the part of the banks with money allocated to modifications. The confusion has been that banks thought this was a benevolent gift of the federal government and not a way to help individual homeowners hold onto to their homes Homes where they raise their children, nurse aging parents, get dressed for work, and struggle every month to write checks for mortgages, kids shoes, electricity, medicine, and sadly, dwindling charitable gifts to public radio.

I listen to your Wells Fargo guest. The service he describes we did not receive and our home loan is through Wells Fargo. 2009 through 2010 we attempted to get help from Wells Fargo. I am a professional engineer I am heavily involved with land development. My salary dropped from 80k per year to 25k per year. The problem we have is 1. we were not involved with the irresponsible lending practices (we are not upside down on our loan). 2. we have never been late with our loan payments. Of course the bank wants to help people that are upside down and have trouble paying, that is a threat of a loss to them. In my position they don't come right out and say it, but what they are communicating through their actions is sell your house. My problem is I have 2 kids in high school and our options for other homes are limited with what I make. So we have had to beg and borrow everywhere to make this work. When our kids are out of high school we have a lot more options and we will sell. If we have to have another loan in the future I hope it is not through Wells Fargo. They would not give an answer. We had to basically demand an answer to our request for help. It took nearly a year to get.


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