Wells Fargo Closes Business Accounts to Firms Offering Loan Mod Services

By Martin Andelman

Last week, when I learned that U.S. banks were systematically canceling the merchant accounts of firms offering loan modification services, thus preventing the firm from accepting payment by credit card, I was stunned. And I thought to myself… well, now I’ve heard everything.

I was wrong, however, I had not yet heard everything.

Today, I was informed that Wells Fargo Bank is unilaterally closing the business checking accounts of companies simply because they are offering loan modification services. Yes, you read that right. Business checking accounts. Because you offer to help people obtain loan modifications from banks… like Wells Fargo.

What’s next… you won’t be allowed to use the bathroom at B of A?

That is truly unbelievable. Can you imagine if that were happening to any other segment? Like coffee shops… banks don’t like coffee shops… so they can’t take credit cards anymore and we’ll cancel their checking account too. It would be on the news every single night. I’ve been all over the world and I can tell you that I’ve seen some sleazy, clip joint places… hey, I was in the service – so sue me… but they all accepted payment by credit card.

But help someone get their mortgage modified so I don’t lose my home to foreclosure and… Oh dear… I’m sorry, no… we simply could not allow that.

Well, you know what? At least that puts an end to the skeptics that thought to themselves: “I wonder if there’s a good reason the banks are canceling merchant accounts for loan mods. Maybe he’s not telling me something. Hmmm…” Sorry, no. It’s the banks and they’re doing this for a very obvious reason… they don’t want people to have help in their negotiations over a mortgage modification. They want loan mod service providers gone.

For the record, the individual that called me and told me about this situation yesterday was no start up, by the way. He’s been a mortgage broker for twenty years. And he’s had no problems with his account, it came as a total surprise. When he asked his banker, with whom he’s had a relationship why he had received such a letter he was told: “It wasn’t me… it come down from above… no business accounts if the firms offer loan modification services.” So, that’s pretty darn clear, wouldn’t you say?

They don’t like what you do for a living.

Or, is there some newfound risk in a business checking account, I’m not aware of? I’ve only had one since 1989. I’m probably not familiar enough with a business checking account to judge. And think about this: I’ve seen banks hesitate more over closing the account of a drug lord than this.

So, that’s Wells Fargo. And who knows who is next. I’m getting on the phone and calling some regional banks. I know the CEO of a couple of them. I’ll let everyone know what I find out. Until then…

Be careful out there.

Merchant Accounts: You Can Accept Credit Cards – If you haven’t already done so, contact me and I’ll put you in touch with a merchant account provider that WANTS your business.  They’re competitive, have an A+ rating, and have been around for 30 years.  They’ve also dedicated an account manager to my readers.  I’ve referred dozens of firms in the last two weeks and have the Thank You notes to prove it.  Everyone’s given it the thumbs up sign.

Don’t play games with your money.  When your merchant account gets terminated, they can hold your funds for six months.   At the moment, I’m trying to help a firm in Las Vegas get their funds released.  Their merchant account was terminated without cause on April 27th.  And they keep getting charged a service fee of $600 every month… even though their account is closed!

I’m not kidding about this… don’t wait until it’s too late.

MFI-Mod Squad Warns Consumers About New Mortgage Rip-Off

June 10, 2009

MFI-Miami and MFI-Mod Squad announced today that it’s calling on state and federal agencies to investigate closing agents and closing attorneys. These agents and attorneys have been charging homeowners for copies of mortgage documents.

Stephen Dibert, President of MFI-Miami, says: “The very people who are supposed to help homeowners are showing excessive greed, especially attorneys who took an oath.”

Homeowners need their mortgage documents when trying to obtain a loan modification or when hiring legal counsel for a foreclosure defense. Though these documents are supposed to be given to homeowners at the closing, they are often not supplied.

After doing hundreds of document examinations, MFI-Miami has discovered that many title agencies and title attorneys overcharged homeowners for title insurance and other fees by thousands of dollars. Now that homeowners are desperately trying to get financial relief and avoid foreclosure, these same agencies and attorneys are charging homeowners hundreds of dollars for copies of documents that should have been supplied at closing.

“Closing agents are essentially holding mortgage files for ransom if homeowners don’t agree to pay a fee,” says Stephen Dibert.  “These agents and attorneys got used to the easy life during the gilded age of mortgage lending. Unfortunately, they’re now clinging to that lifestyle at the expense of homeowners.”

TARP Recipient Refuses to Modify A Loan and Tries to Bilk Lady Out of $18,000!

If you missed it, there is a great article in today’s NYT talking about how Banks who received TARP money are refusing to do modifications for the ones who need it.  BofA offered an unemployed woman a new loan with $18,000 down.  You can see it here:

http://www.nytimes.com/2009/06/03/business/03mortgage.html?_r=1&hp