Mortgage lender agrees to modify some NJ loans

TRENTON, N.J. (AP) - October 6, 2010 -- New Jersey officials say a major mortgage lender has agreed to provide Garden State homebuyers with nearly $67 million in loan modifications to settle charges of deceptive marketing of adjustable-rate mortgages.

Under terms of the settlement announced Wednesday by Attorney General Paula Dow, Wells Fargo Home Mortgage also will pay the state nearly $4 million.

The allegations involve three companies acquired by Wells Fargo in 1998: Wachovia Corp., Golden West and World Savings.

Officials say the companies failed to warn borrowers that choosing a minimum payment option on their "Pick-a-Payment" mortgages could fail to cover the interest, leading to greater debt.

San Francisco-based Wells Fargo projects it will modify loans for 900 or more eligible homebuyers.

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