| Wells Fights Back
Company claims ACORN distorting facts June 29, 2004 By MortgageDaily.com staff
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| ACORN’s public demonstrations and lawsuits against Wells Fargo are “deliberate attempts to distort and misrepresent our business practices and procedures,” according to a company executive. The lender, which has been under increasing pressure by ACORN to change its lending practices, pointed to cases where it helped borrowers even as it was accused of harming them.
Wells vice president Mark Oman made the statement in an announcement issued following word of ACORN’s planned 2,000-person rally in Los Angeles and the filing of a California lawsuit against Wells Fargo & Co. and Wells Fargo Financial Inc. Although Wells had not yet seen the lawsuit, Oman said ACORN took facts about Wells Fargo Financial’s customer relationships out of context in order to paint a false and misleading picture of the relationships. In one case, ACORN reportedly said Wells Fargo had increased a couple’s mortgage payment from $600 to an undisclosed amount, that the couple was quoted a six percent interest rate, charged discount points, never given a good faith estimate, and that the terms of the loan were not disclosed until closing. Oman claims the couple’s mortgage payment was $624 and that the six percent interest rate quote conflicts directly with disclosures in the company’s files. The couple inquired about refinancing and asked for an $8,000 loan for home improvements. While monthly payments on all their debt, including the mortgage and $36,000 in other debt, totaled more than $1,300, Wells said its refinancing lowered it to $1,075 per month. Wells reported that ACORN also claimed that a couple who obtained refinancing from Wells had the interest rate on their loan of 7.87 percent raised to 11.98 percent, causing monthly payments to increase from $724 to $1,950, and that the couple had to pay $8,500 in closing costs. Wells’ version is that it helped the customers put together a refinancing so their delinquent second mortgage loan was made current. Additionally, Wells said it helped reduce the couple’s monthly payment by $400 on all their debt, which included paying off “significant debt” from the consolidation of five credit cards and financing for the purchase of two vehicles. A third example given by Wells was the claim by ACORN that a couple who said Wells Fargo Financial consolidated their loans at rates just below 10 percent, but were unaware the rate was higher than what they were paying on the current loans and that their loan had a five-year prepayment penalty. Wells said the customers were 150 days delinquent on their loan when they refinanced, but it was able to help them avoid foreclosure. The couple said they were very happy that Wells had cured their delinquency and saved them $378 a month in lower payments, according to Oman — who added that the although the five-year prepayment penalty was an industry standard at the time, Wells retroactively lowered it to three years. ACORN’s lawsuit accuses Wells of “misleading borrowers about the real terms and conditions of their loans, ‘bait and switch’ sales tactics, and routinely failing to inform borrowers with good credit that they can qualify for credit at significantly better rates and fees than those charged them by Wells.” Oman pointed out that with such a large organization — 23 million customers and 143,000 team members — “we do occasionally make mistakes but when we do we fix them.” Wells claims that it has fair and competitive pricing, does not tolerate any attempt to sell any product or service unless the terms are fully disclosed, and does not lend to customers unless it is believed they can make loan payments. The San Francisco banking concern also pointed out that it caps points and fees at or below industry standards, and that its delinquency and foreclosure rates are well below industry averages. Related: ACORN Continues Assault on Wells |
