Robert Bush 8:15 p.m., May 19
Community group crashes Carlsbad banking convention
Alliance of Californians for Community Empowerment says Wells Fargo is failing in offering borrowers loan modifications
The Alliance of Californians for Community Empowerment (ACCE) caused a chaotic scene this morning when sixty or more protesters stormed the Best Practices in Retail Financial Services Symposium being held from March 13-15 at the Park Hyatt Aviara Resort in Carlsbad.
ACCE, which has been linked to the much-maligned and now-defunct ACORN community organization, was at the conference to make a direct appeal to Wells Fargo president and CEO John Stumpf to stop the scheduled foreclosure of Betty Badro, a resident of the Los Angeles suburb of Glendale.
In October 2006, public records show, World Savings issued a $600,000 mortgage loan to Badro, which was replaced less than a year later in August 2007 with a new loan for $655,000, also funded by World Savings. World Savings was a division of Golden West Financial, which was acquired in 2006 by Wachovia, who in turn was acquired by Wells Fargo in 2008.
Badro says that when she attempted to negotiate a loan modification to assist her in making payments, she was advised by a Wells Fargo representative that she should stop making the payments in order to get her modification request considered, a commonly reported practice. After taking the bank’s advice, Badro was placed into default in November of 2010, her modification request was denied, and Wells Fargo has been attempting to foreclose on the property since April of 2011. Badro has said that she’s willing and able to resume making mortgage payments if the bank will stop the foreclosure and work with her on a modification.
“I’ve been working hard all my life,” says Badro, a state employee. “I have income, I want to pay my mortgage, I just want a modification with principal reduction so that I can stay in my home. It is everything to me. John Stumpf and Wells Fargo are raking in money – they just had their most profitable year ever - but they're profiting off the homes and livelihoods of American families.”
Badro says that even though Wells Fargo denied her modification request, her HUD housing counselor believes she is qualified to receive such assistance. Wells Fargo is one of the “Big 5” banks that agreed to provide roughly $25 billion in relief to borrowers and foreclosed former borrowers as a settlement over allegations of wrongdoing – mortgage modifications that include reduction of a borrower’s principal balance if they owe more than their home is worth are an option under the settlement terms.
The morning of Stumpf’s speech before Symposium attendees, ACCE members assembled in a conference room down the hall that had been rented under a pseudonym before storming into the main ballroom behind Badro, who took the stage while Stumpf was speaking, introduced herself, and began to explain her situation. Hotel security stepped in front of Badro, and Stumpf hastily left the stage.
Some convention attendees watched Badro amusedly for a few minutes, while others hastily left the room, creating problems for hotel staffers at the main doors, some of whom had engaged in shoving matches with protesters still filing into the room. Eventually the lights and microphone were turned off as conventioneers left the ballroom, leaving the protest group to take over the stage. ACCE later posted a YouTube video of a portion of their exploits.
Badro was informed later in the day that her foreclosure sale date had been postponed indefinitely.
ACCE has singled out Wells Fargo because the group says it is the largest holder of mortgages in California and offers the lowest level of cooperation with borrowers seeking loan workouts including modification, short sales, or offering deeds in lieu of foreclosure. In a report co-authored by ACCE, the group claims that Wells Fargo unfairly targets minority-dominated neighborhoods for foreclosure, has nearly as many properties in foreclosure as the rest of the Big 5 (Bank of America, JP Morgan Chase, Citibank, and Ally) combined, and that despite this, Wells Fargo has offered less than half as much relief to borrowers through principal reduction and less than a fifth of the debt forgiveness through short sales as Bank of America.
The group is calling for a three-pronged solution, asking Wells Fargo to step up its modifications both in frequency and in terms of actual relief offered, to publicly report relief and foreclosure data by race, income, and ZIP code, and to put a temporary freeze on foreclosure proceedings until the first two items are addressed.