Wells Fargo Is Attempting To Evict A Grandmother Who Acted In Good Faith
Abigail Caplovitz Field, Reality Check
Well DOERs, John Stumpf, CEO of Wells Fargo, is a schmuck.
CEO Stumpf knew (because DOERs told him) that the only reason grandma Patricia Martin faced foreclosure was because a Wells Fargo employee–Stumpf’s employee–lied to her daughter about late fees, and then rejected her for the loan modification it told her to apply for. Why did Wells reject Grandma Martin’s modification application? Well, given the facts, I see two possibilities. Stumpf’s company is incredibly incompetent or deadly sin-level greedy. Either way Stumpf’s Wells Fargo is vicious.
Vicious, Yes. Also Incompetent and/or Greedy.
Vicious because Wells Fargo is kicking Grandma and her family to the curb when the Martin family has acted properly and in good faith. As an added bonus, Stumpf’s employees were abusive and cruel. (See Mandelman’s original DOER alert and the update for the background.)
So besides vicious, is Wells incompetent or deadly-sin level greedy? The answer rests on whether Wells’s math errors were inadvertent (incompetent) or deliberate (greedy.) See, the key reason the mod failed is that Wells crunched the numbers using an inflated value for the house: $370k, instead of the $300k it was actually worth. Wells acknowledged it used the wrong number, and re-ran the numbers. But instead of using $300k the second time, they again used $370k. The inflated value meant taking Grandma Martin’s home would be worth more than modifying her loan. Garbage in, garbage out. But for doing the math wrong, the Martin mod would have been approved and the foreclosure averted.
If repeating the math error was an accident, then John Stumpf’s Wells Fargo is incompetent. True, other evidence suggests Wells is fundamentally incompetent; how else to explain what happened to the Bowers family, as recently reported by Reuters? But if failing Grandma Martin with bad math twice was deliberate, we’re talking deadly-sin level greedy because it means Wells didn’t want her money, it wanted her house. And taking her house hurts everyone except Wells. A home in foreclosure can be a profit center for a servicer like Wells.
Everyone Loses With a Foreclosure, Except Servicers of MBS
See, taking the house hurts the Martin family, because they lose their home of 44 years. Taking their home hurts the Martin family’s neighbors and community by lowering property values and damaging the tax base. (Note: Las Vegas and other jurisdictions are trying to limit the damage by forcing bankers to take care of the properties they evict people from.) Finally taking the home also hurts investors in the mortgage backed security Grandma Martin’s mortgage is in, because right now homes are lousy collateral.
