Wells Fargo loan servicer taken to Court: Loan Modification Supervisor summoned to appear for questioning in homeowner’s bankruptcy case.

Many people are wondering, just what does it take to get a response to a loan modification request sent to a mortgage servicer and how to get a faster response. One woman received an unusual opportunity to question the servicer about the status of her loan modification- under oath.

As explained in a recent New York Times [http://www.nytimes.com/2009/09/04/business/economy/04wells.html?_r=1&scp=1&sq=bankruptcy%20loan%20modification&st=cse] article, an Arizona bankruptcy judge summoned a senior Wells Fargo executive to appear and answer questions, under oath, about a loan modification. The homeowner, who was forced into bankruptcy after losing her job, had been waiting months for a response. After cross examination by the homeowner (I can think of many people who would love the opportunity to question their loan servicer’s representative under oath), the Wells Fargo executive, who initially denied that the homeowner had supplied sufficient documentation, eventually admitted that everything requested had been provided. It turns out, the loan modification was denied months ago. However, Wells Fargo failed to notify the homeowner.

The judge’s decision is yet another example of the growing frustration with mortgage servicers who, for unknown reasons (although we could speculate on them) are slow to offer loan modifications to troubled borrowers. While little was accomplished in that bankruptcy proceeding (no one was sanctioned and, although the executive promised to resume negotiations with the borrower, the situation does not appear positive), by summoning Wells Fargo to court, the judge made a statement to loan servicers, which they will hopefully hear. A small victory of sorts for all those homeowners who have been waiting for months to hear back from the bank.