A have a client who lost his home, which was worth considerable more than his mortgage from Wells Fargo bank, in a foreclosure more than a month ago that discharged the entire amount of the loan. Today, he calls me and tells me that he just got a letter today from Wells Fargo bank with the loan number, personal identifying information, pre-foreclosure loan balance and interest rate, etc. asking him to call them to talk about modifying his loan. Incidentally, he'd also repeatedly sent them extensive packets of loan modification information over the previous six months, which each time they claimed to have never received and never acknowledged.
Not only is Wells Fargo bank too big to fail, it also appears to be to stupid to live. If it ever makes economic sense for a bank like Wells Fargo to modify loans, it is missing the boat. This is a government program that it participates in formally, but doesn't seem to actually support.
Of course, a less charitable interpretation is that somebody in management at Wells Fargo bank has decided that loan modifications are not a profit center and has deliberately set up this division of the bank to fail, because these discussions frequently discourage debtors from taking the rest of the foreclosure process seriously and thereby improve their rate of success in the collections process. For example, the loan modification division employees at Wells Fargo bank routinely tell debtors orally that they don't have to take legal action and shouldn't try to cure a loan that will otherwise go into foreclosure so they can get a modified loan, although this division of Wells Fargo bank has a strict policy of not putting any of these communications in writing. The loan modification employees at Wells Fargo go blithly on their way spinning tales of forgiveness and compromise while the collections law firm that Wells Fargo has retained (one Colorado law firm whose name I will omit has the overwhelming majority of this business statewide) does not communicate any knowledge whatsoever that this is happening.
But, in Colorado, at least, something called the credit agreement statute of frauds prevents anyone from suing a bank for making misleading or outright fraudulent oral representations of this kind from a bank employee under state law, for any reason, even though a third party debt collector or attorney who made similar representations would have civil liability for compensatory and punitive damages, even if you can identify who said it and when, even if you have a tape recording of the conversation.
Is it so much to ask that different divisions of the same bank who are interacting with the same customers regarding the same loan have any communication with each other whatsoever? Is it so much to ask that banks have a legally enforceable duty to refrain from telling the people who owe them money that they can ignore legal process that is delivered to them and should refrain from exercising their rights in that process?