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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Settlement offers loan modifications through Wells Fargo

OLYMPIA – Washington residents who obtained problematic mortgages from Wachovia Bank and Golden West Corp., which did business as World Savings Bank, may qualify for loan modifications under a settlement with Wells Fargo Bank. At least 400 Washington borrowers who received payment option adjustable-rate mortgages will be eligible for loan modifications that will provide more than $29 million in mortgage relief, Washington Attorney General Rob McKenna said today. This sum includes nearly $12 million in principal forgiveness for Washington homeowners. The settlement also applies to certain borrowers in seven other states. The agreement, to be filed in Pierce County Superior Court, is the latest in a series of efforts by the attorneys general to help struggling homeowners. The states claimed that “Pick-A-Pay” loans offered by Wachovia and Golden West/World Savings Bank violated consumer protection laws because they expose borrowers to substantial economic risks that weren’t adequately disclosed. The settlement also includes $1.6 million for a foreclosure relief fund to be paid to the Washington Attorney General’s Office. The money could be used to provide refunds to individuals who lost homes or to assist with the state’s efforts to prevent or mitigate foreclosures. An additional $200,000 is allocated to reimburse the office for legal costs. Wells Fargo purchased Wachovia and acquired its subsidiary, Golden West, at the end of 2008. Overall, loan modifications will be offered to 8,715 eligible borrowers in Arizona, Florida, Colorado, New Jersey, Washington, Texas, Illinois and Nevada. The agreement will save borrowers $772 million. McKenna encouraged Washington residents facing foreclosure to call the state’s Homeownership Information Hotline at 1-877-894-4663 or visit his website at www.atg.wa.gov/foreclosure.aspx for additional resources.