Philly’s biggest bank flip-flops on mortgage help, leaving homeowners in suspense
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Some Philadelphia homeowners are feeling left behind after Wells Fargo pulled out of the state’s CARES Act mortgage assistance program, then reversed course a week before the deadline.
Mike Zwick, a resident of Kingsessing, like many Americans, has a partner considered to be at high risk for COVID-19. Realizing that his job at Trader Joe’s was likely to expose him to the virus, Zwick took time off to keep his partner safe. Then he looked for ways to keep his mortgage at bay as the pandemic raged and the economy tumbled.
As soon as the option became available in Pennsylvania, Zwick, 38, asked for help.
He had a good chance of getting help. An amount of $ 175 million from the federal CARES law has been invested in a program of the Canadian Housing and Finance Agency provide help tenants and homeowners in difficulty “suffered economically during the pandemic”. Through the Pandemic Mortgage Assistance Program (PMAP), $ 25 million designated for mortgage relief, offering a payment increase of up to $ 1,000 per month for six months.
Zwick completed his PMAP application on July 6, the first day it was available online. It was approved on July 15.
Following its approval, Wells Fargo, Zwick’s mortgage lender, set and missed deadlines to accept or decline the funds. August 27 came and went. September 11 has passed. Two months after his request was approved, he finally got confirmation – but it wasn’t what he expected.
On September 17, a bank representative called Zwick and told him that the bank “would not participate in the relief program”.
The 38-year-old said he felt blocked and uncertain. It was approved by the government, he said, and got a loan through a small community bank. The loan was then sold to Wells Fargo. “It’s ridiculous, they have nothing to do,” Zwick said. “It’s state money.”
It wasn’t just him. Wells Fargo had decided to cut the entire PMAP program, citing potential inequality in eligibility, lack of clarity on the part of the state and confusion for its investors.
“After careful consideration … we have determined that we will not be able to participate in the program,” Wells Fargo spokesperson James Baum said in a statement.
A week after Zwick’s refusal, Wells Fargo announced it would reverse its decision and join the program.
As of mid-September, 420 Philadelphians had applied for PMAP mortgage assistance, over 2.2k across the state.
Several banks participate, including large institutions like PNC, according to the Inquirer. Applications for the program fully end on September 30, although only $ 8.4 million of the $ 25 million in CARES Act funding has been allocated to homeowners so far.
Advocates of fair mortgages have called Wells Fargo’s initial abandonment of the program “outrageous,” and potentially sufficient legal reason to end a foreclosure, if it had come to this.
“Could the lender not accepting the money be considered a fair defense in foreclosure? I think it’s possible, ”said Irwin Trauss, an attorney for Philadelphia Legal Assistance, commenting on the Wells Fargo situation.
If the policy had not been reversed, James Jackson, a mortgage advocate for the Philadelphia Unemployment Project, said the bank would have “prevented ordinary people who have become unemployed because of the pandemic from receiving aid. federal housing ”.
Wells Fargo has a blotchy mortgage record in Philadelphia.
In 2019, the bank settled a lawsuit brought in by the city, accusing it of having violated the Fair Housing Act by target communities of color with predatory high interest loans (sometimes referred to as “reverse redlining”). Wells Fargo has not admitted responsibility in the case, but has contributed $ 10 million to Philly’s sustainable housing programs.
Now that Wells Fargo has agreed to join PMAP, Zwick doesn’t know what to do. He called the bank last week, but didn’t get an answer.
Still, Zwick is “confident” he will get help, he said. “There’s no reason we shouldn’t.”