Wells Fargo to modify ARMs in Illinois, 7 other states

From the Chicago Tribune by By Mary Ellen Podmolik.

At least 531 Illinois homeowners will be offered mortgage loan modifications by Wells Fargo Bank after an investigation into allegedly deceptive marketing of payment option adjustable rate mortgages.

Illinois and seven other states investigated Wachovia and Golden West’s marketing of pay-option ARMs, potentially risky loan products because they allow borrowers to pay only a minimum payment, with the rest of the funds due added to the balance of the loan, which eventually resets at much higher required payments. Wells Fargo owns Wachovia and Golden West. …