This Wells Fargo REO property is in Livermore, California.
Mary "Muffie" Gabler, Central Region Community Development Manager, Wells Fargo
Wells Fargo, the nation's largest mortgage lender, uses a multifaceted approach
to managing and disposing of real estate owned (REO) properties to help
stabilize and revitalize communities. The bank follows two simple rules. First,
whenever possible, avoid acquiring REO. Second, when REO properties are
acquired, get them off the books as quickly and productively as possible.
Wells Fargo uses a variety of homeownership preservation strategies to help
borrowers remain current with mortgage payments and keep their homes. If
foreclosure becomes necessary, the bank works to sell or dispose of foreclosed
properties in ways that benefit the bank and its investors, and communities hit
hard by high rates of foreclosure and the recession.
Wells Fargo has three business units working to achieve these goals.
Wells Fargo Housing Foundation cultivates and manages relationships with
Premiere Asset Services manages REO properties.
Wells Fargo Community Development Corporation invests in nonprofit
organizations and local community revitalization efforts, and, as a result,
seeks to sell or transfer REO properties to community groups that renew
communities and help low- and moderate-income persons and families find
Typically, Wells Fargo prepares REO properties for sale and lists them on the
Premier Asset Service's Web site and with local Multiple Listing Services.
During the recent economic downturn, Wells Fargo sought other ways to sell REO
properties and has welcomed offers from nonprofit organizations looking to buy
properties at a discount. Since 2008, Wells Fargo has asked nonprofit
organizations, public agencies, and other interested buyers to make bids,
whenever possible, through the
National Community Stabilization Trust. This allows the bank to benefit
from efficiencies and to leverage the nonprofit's expertise, technical
assistance, and standardized procedures to help list, price, and inspect
The Wells Fargo Housing Foundation steps in when the nonprofit organization
wants to buy property in a community where the Stabilization Trust does not
operate. The Foundation supports homeownership opportunities for low- and
moderate-income families in several ways, including discounting the purchase
price for nonprofit organizations or donating properties to nonprofit
organizations or government agencies. These requests are reviewed individually.
REO donations: Wells Fargo periodically examines its
REO portfolio and identifies properties for donation, and its foundation
identifies nonprofit organizations that can rehabilitate and sell the
properties. Nonprofit organizations and government agencies can also ask the
bank to donate REO properties. The foundation's ability to donate REO
properties not owned by Wells Fargo depends on the delegated authority owners
or investors have given the bank, market conditions, and other factors.
Discounted sales: Wells Fargo's REO Discounted
Properties Program transfers REO properties at a discount to government
agencies and nonprofit organizations revitalizing neighborhoods and provides
sustainable homeownership and rental opportunities to low- and moderate-income
persons and families. Nonprofit organizations and government agencies
interested in buying discounted properties may apply using the foundation's online application. Applicants must prove they are a nonprofit
organization or government agency. Available properties and prices are listed
on the Wells Fargo and
Wachovia REO Web sites. When applicants make discounted bids, Wells
Fargo may accept, counter, or request revised bids. Discounted bids for
properties owned by investors and serviced by Wells Fargo must be approved by
Property rehabilitation: Wells Fargo's REO
Rehabilitation Program supports the volunteer efforts of bank employees working
with nonprofits to revitalize neighborhoods and to find homes for low- and
moderate-income renters and buyers. The program gives up to $35,000 to a
nonprofit organization as an incentive to team members to perform
Premiere Asset Services manages Wells Fargo's REO properties and ensures they
are maintained until sold. The bank ensures that REO properties are maintained
in a number of ways:
When loans default, if Wells Fargo is unable to contact the borrowers, the bank
begins monthly inspections of the properties.
Once homes are vacant, Wells Fargo secures the properties, removes exterior
debris, maintains lawns and swimming pools, and takes other necessary steps to
care for the properties until they are sold.
When properties are added to REO inventory, they are prepared for sale by real
estate agents. If they don't sell, Wells Fargo may discount the list prices and
accept discounted bids from nonprofit organizations and government agencies.
Wells Fargo Community Development Corporation offers an REO
Acquisition/Rehabilitation Equity Equivalent Investment (EQ2) for nonprofit
organizations and government agencies to convert foreclosed properties into
affordable homes for low- and moderate-income persons and families. Wells Fargo
provides low-cost, flexible loans to established nonprofit organizations and
government agencies interested in buying bank-owned, single-family homes for
rehabilitation and resale to qualified low- and moderate-income borrowers.
Funding, available in amounts up to $1 million per applicant, is structured as
unsecured, subordinated debt for five years at 2 percent interest and may be
used for due diligence, acquisition, infrastructure, rehabilitation, and
Eligible EQ2 applicants must demonstrate the following qualifications:
A strong track record of acquisition and rehabilitation of single-family homes.
A business plan that demonstrates how the nonprofit organization or government
agency can successfully acquire, rehabilitate, and sell homes to low- or
moderate-income borrowers in the current real estate market.
Experience with down-payment assistance programs and providing home buyer
education before and after a purchase.
A solid financial position and an unqualified audit for at least three
consecutive fiscal years.
For more information on applying for an EQ2, contact a Wells Fargo Community
Development officer or visit the
Stable Communities Web site.
Leading the Way by Building Partnerships
Wells Fargo was the first bank and mortgage loan servicer to work with the
Stabilization Trust to transfer REO properties to nonprofit organizations and
government agencies working to rebuild distressed communities. Wells Fargo
helped pilot the Stabilization Trust's First Look Program, which gives
nonprofit buyers the chance to see and buy REO properties at a discount before
they are available to the general public. The program began in Minneapolis,
Minnesota, in conjunction with the
Greater Metropolitan Housing Corporation (GMHC).
At the end of September 2009, Wells Fargo notified the Stabilization Trust of
about 1,200 REO properties for sale in designated zip codes. About 150 REO
properties had been acquired by the nonprofit's partners nationwide. Wells
Fargo expects sales to increase as funds from the
Neighborhood Stabilization Program (NSP) reach communities faced with
high foreclosure rates and as more Stabilization Trust partners become
Recently, Wells Fargo initiated the Priority Communities Program to support
efforts by the Stabilization Trust and its local partners. This program will
give grants to local partners in 30 metropolitan areas for subsidies,
down-payment assistance, and direct investments using REO properties to
Wells Fargo expects the Stabilization Trust and its local partners to continue
to be key participants in community stabilization efforts nationwide. Because
local partners rely largely on NSP funds to buy, renovate, and sell REO
properties, neighborhood revitalization efforts are likely to expand and gain
momentum as more NSP grants are issued and grantees demonstrate the
effectiveness of their work. Similarly, as NSP funds become available and local
partners expand in number and capacity, a greater share of the properties that
Wells Fargo refers to the Stabilization Trust will likely be purchased by the
Stabilization Trust's local partners.
As one of the nation's largest lenders and servicers of mortgage loans, Wells
Fargo is committed to supporting community stabilization efforts, and will
continue to work with the Stabilization Trust and other partners to revitalize
communities as well as housing and lending markets.
For more information, e-mail Mary