In an effort to reduce the number of foreclosures across the country and keep customers in their homes, Wells Fargo & Company announced Saturday that it is continuing to expand its use of the federal Home Affordable Modification Program (HAMP) and other modification programs.

“From the beginning, our goal has been to work with our customers to avoid foreclosures wherever possible while balancing the interests of the 92 percent of our customers who continue to stay current in their payments,” said Mike Heid, co-president of Wells Fargo Home Mortgage. “When a viable alternative exists, there is no incentive for us to go to foreclosure sale. It doesn’t benefit us, our customers, communities, our shareholders, or our investors.”

Heid said Wells Fargo is using every means at its disposal to move modifications forward. As part of these efforts, the company has extended the trial period for HAMP customers who are making their reduced payments but have yet to submit their documents.

From January 1 through November 30 of this year, the company had 422,001 active trials and completed modifications put in place. Of this total, 99,674 were HAMP modifications. For every one foreclosure sale on owner-occupied properties in November, Wells Fargo initiated or completed three modifications, using both HAMP and non-HAMP modification efforts.

Of the 99,674 HAMP active trial starts and completions reported, approximately 56,000 have not made all three trial payments yet, because most are not yet due for their third trial payment. According to the company, 44,000 of its HAMP customers have completed all three trial payment as of November 30, and approximately 40 percent of these customers either have or are ready to convert to a final modification, including the 3,537 completed modifications reported by the government.

An additional 10 percent will be ready to convert after signing and returning the final modification agreement which Wells Fargo has sent to its customers, but 45 percent still need to send in some or all of the required documents. The remaining borrowers who have made three trial payments were determined to be ineligible for HAMP modifications after a review of the documents they submitted.

Wells Fargo said it has been very active in its outreach efforts to gather the required HAMP documents from customers. On average, the company has attempted to contact borrowers who have provided only partial documentation more than 20 times and has spoken directly with customers five times. Additionally, the company has used door-to-door effort to secure these documents.

In an effort to improve responsiveness to its customers and enhance its overall operating process, Wells Fargo increased its home retention staff by more than 7,600 people in 2009. Currently, the company has a total of 15,000 staff based in the United States to manage the increased home preservation volume.

For customers who don’t qualify for the federal HAMP or whose HAMP trial modifications have been cancelled, Wells Fargo has had success in materially lowering mortgage payments through its own modification program. The company’s Wachovia pick-a-payment modification program has been able to address the unique nature of Wachovia’s negative amortizing loans through a combination of term and rate adjustments and principal forgiveness.

According to the company, about 98 percent of these customers have received material payment decreases. As reported in Wells Fargo’s third quarter earnings announcement, the re-default rates after six months on this portfolio have been less than half the re-default rate for industry modifications for a comparable amount of time. Additionally, Wells Fargo’s delinquency and foreclosure rates in the third quarter of 2009 were two-thirds that of other large competitors and the industry in total, according to the November 27 edition of Inside Mortgage Finance.

As the downturn in the economy continues to have an impact on individuals and communities, Wells Fargo said it remains committed to exploring all options to keep people in their homes. The company said it will also continue to work with the U.S. Department of Treasury on changes to HAMP, enabling it to evolve with the changing economy and the challenges the economy has created for some households.