Wells Fargo To Modify 15,000 Option-ARM Loans In Calif.
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LOS ANGELES (AP) — California Attorney General Jerry Brown says Wells Fargo Bank N.A. has agreed to modify adjustable-rate loans made to nearly 15,000 Californians by lenders that it acquired.
Brown announced Monday that the roughly 14,900 modifications will be worth more than $2 billion. He says the bank also agreed to pay $32 million to thousands of borrowers who lost their homes to foreclosure.
The deal applies to so-called pay option-adjustable rate mortgages made by Wachovia Bank and World Savings Banks. Wachovia Bank bought World Savings in 2006. Wells Fargo then purchased Wachovia in 2008.
Brown says the loans were harmful because their payments ballooned to amounts that unsuspecting borrowers could not afford.
Wells Fargo did not immediately return an e-mail from The Associated Press seeking comment.
(Copyright 2010 by The Associated Press. All Rights Reserved.)