Let the blowback begin.
A New York homeowner last week fought back against the denial of a mortgage modification by Wells Fargo — using as a cudgel in the bitter spat the bank’s admission just weeks earlier that a computer glitch wrongly denied hundreds of customers home loan help.
The move by Mia Derosa is the first known effort by a Wells Fargo customer to act on the bank’s Aug. 3 admission that its goof led to about 625 homeowners being denied mortgage relief.
Roughly 400 of those homeowners who were battling a foreclosure action between April 2010 and October 2015 eventually lost their homes because of Wells Fargo’s mistake, the bank said in a regulatory filing.
Derosa, who lives in Nyack, NY, about 30 miles north of Midtown Manhattan, took out a $650,000 “Pick-a-Pay” mortgage in February 2006 — and by 2011 was in financial trouble.
“Pick-a-Pay” mortgages were all the rage in the home-buying craze early in the aughts. They offered borrowers an extremely inexpensive route to home ownership by requiring them to make monthly payments of just some of the interest on the loan — and no principal.
The unpaid interest would be added to the principal.
The loans turned toxic when monthly payments would balloon past what the borrower could afford — creating a tsunami of defaults and foreclosures.
Derosa got a mortgage modification from Wells Fargo under the federal government’s HAMP program — but defaulted on it in 2016, the bank said. Subsequently, Wells reviewed four modification requests from Derosa — rejecting each of them, it said.
In each of the rejections — the last of which came in January — Wells cited Derosa’s insufficient income, according to court papers.
That’s not true, Linda Tirelli, Derosa’s lawyer, shot back.
Derosa has a “substantial, solid, steady income” of nearly $11,000 a month, according to court papers filed Aug. 16 by Tirelli.