Wells Fargo Group EVP Mark Oman: "Our sales practices are among
the best in the industry."
"Our consumer finance business is 106 years old and one of the most highly regarded businesses in the industry," he said. "We comply with all laws that apply. The sales practices of our consumer finance business, our mortgage business, and all our more than 80 businesses, are among the best in the industry. We cap points and fees at or below industry standards. Our delinquency and foreclosure rates are well below industry averages. In an organization as large as Wells Fargo, with 23 million customers and 143,000 team members, we do occasionally make mistakes but when we do we fix them. We have a long-standing policy and process for responding to customers who have complaints. We carefully research those complaints and if we have erred we do what is right for the customer.
It's very simple. We do not tolerate any attempt to sell a customer any product or service unless the terms are fully disclosed. We do not lend to customers unless we believe they can make loan payments, period. The credit we extend must produce demonstrable benefit for customers - such as reducing their interest rate or monthly payment, their total amount of payments or helping correct a delinquency on a previous real estate-secured loan. Pricing for all consumer loans is just like pricing for insurance: the greater the risk the higher the price. We do not price in a vacuum. Our pricing is fair and we price to be competitive. Our risk analysis must be based on a total view of our customers' financial picture. That includes their other financial obligations, job and credit history. We survey our customers regularly, they give us high marks for service quality and they tell us they recognize and appreciate the value of the service we provide them. The most significant way they do this is by giving us their business."
Oman gave the following examples of recent attempts by Acorn to take facts about Wells Fargo Financial's customer relationships out of context and deliberately distort the facts:
Acorn claim: Two Wells Fargo Financial customers, a husband and wife, said Wells Fargo had increased their mortgage payment from $600 to an undisclosed amount - that Wells Fargo Financial quoted them a six percent interest rate, charged them discount points, that they were never given a good faith estimate and that the company did not give them the terms of the loan until closing.
Wells Fargo's response: The couple inquired about real estate-refinancing. They asked for an $8,000 loan for home improvements. Their actual monthly payment on their old mortgage was $624 but monthly payments on all their debt totaled more than $1,300. With their re-finance, their new monthly payment became $1,075 - which also covered $36,000 of other debt. The claim that Wells Fargo quoted a six percent rate conflicts directly with all the disclosures in the company's files. Wells Fargo Financial did not even have a six percent rate to offer and the company has a signed copy of the loan agreement. Wells Fargo Financial reduced the couple's monthly payment by $255 or more than $3,000 a year.
Acorn claim: Wells Fargo Financial customers said the company had refinanced the couple's mortgage from their previous 7.87 percent interest rate up to 11.98 percent. They claimed that their monthly payments, as a result, rose from $724 to $1,950. They claimed they had to pay $8,500 in closing costs. Wells Fargo's response: The company helped the customers put together a re-financing so their delinquent second mortgage loan was made current. The couple also was able to consolidate significant debt including five credit cards paid in full and finance the purchase of two vehicles. Their monthly payment on all debt was reduced by more than $400.
Acorn claim: A husband and wife claimed Wells Fargo Financial consolidated their loans at rates just below 10 percent, that they were not aware that the rate was higher than what they were paying on the current loans and that their loan had a five-year pre-payment penalty.
Wells Fargo response: The customers were 150 days delinquent on their loan when they refinanced. Wells Fargo Financial's store manager worked with them to avoid foreclosure including a refinance with more affordable terms. The couple was correct about the pre-payment penalty which was an industry standard at the time. Wells Fargo Financial retroactively lowered it to three years. The customers said they were very happy with Wells Fargo Financial and that the company cured their delinquency and saved them $378 a month in lower payments.
- Wells Fargo Home Mortgage is the nation's #1 mortgage lender to ethnically diverse homebuyers and the #1 mortgage lender to low-and-moderate income homebuyers; *
- Wells Fargo has contributed $32 million the past ten years to affordable housing initiatives through the Wells Fargo Foundation and the Wells Fargo Housing Foundation;
- Wells Fargo Bank, N.A. has been rated "Outstanding," the highest regulatory rating possible, in its most recent Community Reinvestment Act (CRA) examination by the Office of the Comptroller of the Currency (OCC), for meeting or exceeding community needs in areas such as affordable housing and small business lending;
- Wells Fargo is among the ten largest givers in all industries in corporate America ($82 million to 14,000 non-profits in 2003, or $1.6 million weekly on average.)