Wells Fargo

Remarks of Chris Jones and Monica Sudler at 2004 Wells Fargo Annual Meeting

Chris Jones

Good afternoon, my name is Chris Jones, and I am a board member of California ACORN. 

ACORN is here today because Wells Fargo high cost subprime loans are hurting people in our communities.

Resolution number 6, which the Coalition for Responsible Wealth helped offer today, links the pay of top management to reforming abusive lending practices.

Predatory loans have no place in the business of a responsible company.

On issue after issue Wells Financial has stood out for being unfair, even among other high cost subprime lenders. For example,  for many years Wells charged more than 11% in upfront fees in most first mortgages they wrote.  Wells kept selling financed credit insurance up until the very last minute until the laws changed, and then Wells tried to keep selling a different kind of financed insurance. 

Borrowers are still paying for those exorbitant fees, and they are still telling us new horror stories all the time. Stories about having been promised good rates, and ending up in high rates. Stories about credit cards that no one ever explained were secured by their homes. Stories about about being misled into refinancing perfectly good mortgages into new loans at much higher rates.

One thing that we think is especially wrong is that Wells does not seem to have a serious comittment to making sure that borrowers in the same circumstances pay the same amount for their loans, no matter which part of the company they deal with. Or to make sure that borrowers with good credit get a fair rate from Wells Fargo Financial.

We think it is outrageous that people in our neighborhoods – who get lots of mail, and calls, from Wells Fargo Financial, but see many fewer bank branches  - end up paying thousands and thousands of dollars more for credit.  Or that we sometimes end up at risk of losing our homes as a result. We do not think this follows the most basic principals of fair lending.

Unfortuneately, Wells does not even seem willing to admit that they have a problem, or that they have ever done anything wrong.

We have watched other lenders react this way, and we do not think it made good business sense in the long run.

• First,  some of the lenders then ended up the target the subject of major investigations by state and federal regulators.

• Second,  why should Wells risk the reputation of its large A lending business by continuing questionable practices in the subprime business?

• Third, making loans that drain wealth, rather than build it, from working families pushes these families out of the financial mainstream.  Potential long-term customers instead turn in a downward spiral to fringe financial products.

We ask you to support the resolution, and to urge Wells to take strong steps against abusive lending practices, and to treat all borrowers fairly.

Monica Sudler

Hello, my name is Monica Sudler, I am an ACORN member, and I live in Boston.

 I regret the day our family ever became involved with Wells Fargo Financial. 

My husband and I had decent credit records: in the four years we owned our house before getting a second mortgage from Wells, we weren’t late on a single mortgage payment.

Despite that, Well sold us a loan at a high rate of 10 and a half percent, but promised to lower it after six months.  But he went back on his word, and we were stuck in the loan.

Wells Fargo told us that fees would only be charged on our loan if we paid it off early.  But the loan contained over $4,500 in origination fees – all that money came right out of our home’s equity.

Meanwhile, the loan still contained a prepayment penalty.  This penalty lasted for three years, and it cost us close to $5,000 when we refinanced to a lower rate last year.

Since I joined ACORN’s campaign, I realized that my family’s experience is not unique.  Wells Fargo makes unfair loans, which they  sell through aggressive and deceptive sales tactics –throughout the country. 

There’s a retired African-American couple from New Orleans – a retired Marine and his wife.  Two refinancings with Wells Fargo stripped away over $24,000 of their equity, inflated their interest rates, and left them with a loan for more than their home is worth.

There’s Kathleen and Thomas, a white couple from Minnesota.  Their 680 credit scores didn’t stop Wells from giving them a 10 percent interest rate – when ‘A’ rates were 6 percent – and large fees on top of it.

There’s a retired school teacher from here in California. Wells misled her into refinancing her existing mortgage at 7.25% into a new loan at 9% ( even though rates over all had gone down ), charged her more than $10,000 in financed fees to do it, and then locked her into the new high rate with thousands of dollars more in prepayment penalties.

With ACORN’s help we have now refinanced into a new loan at less than 6%. But we lost a lot of money, and even more peace of mind, to Wells in the meantime.  I want justice for everyone who Wells treated the way they treated me and my husband, and I want them to stop doing that to anyone else. That’s why I ask you to support our resolution.

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