Disposition of Distressed, Vacant and Abandoned Property in Local Communities

1. Disposition of Distressed, Vacant and Abandoned Property in Local Communities Phil Bracken, EVP Wells Fargo Home Mortgage U.S. Conference of Mayors Annual Meeting June 11, 2010

2. The Impact of the Crisis on U.S. Wealth • Total household assets declined by $13 billion and real estate assets by $7 billion from their respective peaks (2007 and 2006) to troughs (both in Q109). • Some rebound occurred in 2009. Source: Federal Reserve Board

3. The Three Housing Challenges • Stopping the Flow of Foreclosures and Short Sales (Keeping people in their homes) • Cleaning up (disposing) of the existing inventory • Preventing the Crisis from re-occurring

4. 1. Stop the Flow (Keep people in their homes) Wells Fargo’s foreclosure rate of 1.95 percent continues to be considerably less than the industry’s average of 3.18 percent.* • Make good loans • Work early and often with customers on options to help make their mortgage payment sustainable. • Use case-by-case and streamlined methods that take into account customers’ circumstances. • Align our loss mitigation efforts with investor guidelines and servicing policies. • Before a house is moved to foreclosure sale, conduct a final loan review to ensure all workout options have been exhausted. *Source: Inside Mortgage Finance, May 21, 2010

5. 1. Stop the Flow (keep people in their homes) In 2009 and through April 2010, Wells Fargo has helped two million households with mortgage payment relief. • Continue to make every effort to keep people in their homes through the federal Home Affordable Modification Program (HAMP) and other modification programs focused on mortgage payment relief. • In 2009 and through April 2010: • 111,416 active trial and completed HAMP modifications, including 36,094 permanent modifications • 390,000 non-HAMP active trial and completed modifications • Refinanced more than 1.5 million loans

6. 1. Stop the Flow (keep people in their homes) The Wells Fargo Home Preservation Workshops Nine Cities thus far—Atlanta; Baltimore; Chicago; Phoenix; St. Paul, Minn.; Los Angeles; Oakland, Calif.; Miami; and Minneapolis More than 12,000 customers face-to-face Many customers who attended have received some kind of workout option on site or shortly after the events. Credit counseling on site Fannie Mae/Freddie Mac/FHA solution “decision makers” on site Additional cities planned—Cleveland, Las Vegas and Memphis

7. 2. Cleaning Up (Dispose of the Inventory) • Fully underwritten - FHA fixed-rate 30-year mortgage loans • Available anywhere in America • Improvement (repair costs) built into the 30 year mortgage • 3.5% downpayment requirement for owner occupants • Streamlined 203(k) ($35,000 of repair and under) • Regular 203(k) (more than $35,000 of repair) • Loan amount based on “as repaired” condition • Repair amounts put in escrow and disbursed as work completed • HUD approved contractor required • The LOANS ARE ASSUMABLE!!! • See next two pages The FHA 203(k) mortgage – (America’s Jobs Program?)

8. 2. Clean Up (Using the FHA 203(k) program)

9. 2. Clean Up – A Wells Fargo Exclusive -Remodel ExpressSM[203(k) In A Box] • Remodel Express provides the security of working with some of the most successful professional companies in America a renovation solution to purchase or refinance and remodel a home. [203(k) In A Box] • Home Depot • Lowes • Sears • Program features: • The maximum repair cost is $35,000 • Faster processing and underwriting times, and lower fees • One-year workmanship warranty on all work performed by national home improvement company • Loan amount may be up to 110% of ‘after improved’ value • Wide range of allowable repairs/improvements, such as: • Energy efficiency—Appliances, insulation, windows, HVAC • Major/minor remodeling—Kitchens, baths, room additions • Basics—Roof, plumbing, electrical, foundation repairs septic and well systems, painting, floors

10. 2. Clean Up – (Needed Enhancements to the FHA 203(k) Program) • Ideas for expanding availability to non-owner occupied properties • Expanded to investors to purchase and rehabilitate properties • Fixed-rate mortgage at affordable rates • Fully assumable • Investors would have to sell to owner occupants or lose affordable features • City outreach to raise awareness among residents • Owner occupant auction process • Leverage diverse segments networks • Cities actually obtaining a 203(k) mortgage themselves

11. 3. Preventing the Crisis from Re-Occurring (Wells Fargo’s responsible mortgage lending and servicing principles) Highlights of our long-standing principles: • Facilitate informed customer choices. • Approve applications for loans only if we believe the borrower has the ability to repay the loan according to its terms. • Offer prime-pricing options to first mortgage loan consumers whose loans qualify for such pricing. (Prime Loan Filter) • Approach every interaction from the customer’s point of view. • Provide clear and timely information to consumers, understanding how complex homeownership and financing can be. (Transparency) • Provide tools, products, services and information that can help our customers manage their credit. • Do all we can to help keep people in their homes whenever possible.

12. The 203 (k) Solution -- (America’s Jobs Program?) Get rid of inventory Stabilize House Prices? Create Jobs? Create Rental Housing? Create Lease Purchase Options? Create Assumable Fixed Rate Loans Improve Tax Revenue for Cities? No Budget Impact to Taxpayers Questions?