Between these two headlines from April 20, 2010 I could not decide which was more important, so I figured I would use them both.
The first headline is good news for Wells Fargo shareholders who, according to their press release, stand to make forty five cents per share of common stock on 21 billion in revenue. The numbers posted reflect a giant bank which is thriving. In fact, Wells Fargo is doing so well it bought another big troubled bank last year, Wachovia, a purchase helped out by a little bit of TARP money. Things are good at old Wells Fargo.
Unfortunately, this happy prosperity is not shared with many of Wells Fargo's customers.
The second headline, which will never make the news, is one I made up. It is about a little old lady who was in my office this week. She owns a home worth about $70,000. Five years ago, she took out a loan from Wells Fargo for over $140,000. Five years ago, appraisers for banks like Wells Fargo would say anything to make sure a loan was approved and loan brokers would do anything to get the loan to closing. She was dumb to take such a large loan, and Wells Fargo was dumber to make it.
Her household income, consisting of a small pension, social security and disability for her sick husband, is about $3,100 monthly. Her mortgage payment is $1,600.00.
She is having a hard time paying such a relatively large mortgage and called Wells Fargo to see if the loan could be modified. "Sure..." the nice lady from Wells Fargo said..."All you have to do is pay off all of your credit cards."
This poor old lady has credit card bills totaling $20,000. She and her husband used them for many years, more so after he got sick and could no longer work. They can't pay them anymore. Collectors are calling her all day every day. Wells Fargo's request that the cards be paid in full is nonsensical and hardly worthy of comment, aside from the fact that these large national lenders tell their worried customers things like this every single day.
How does a lawyer advise someone in her position?
Her true situation is this. She's old enough that if she stopped paying everybody, it would take a long time for her to lose her home. The local courts are presently flooded with foreclosures, each takes a long time to process. The credit card companies will call and write her, and maybe sue in a few years, but she is underwater in every direction, and she has no assets to satisfy any judgment. The biggest price she is paying is personal. She was very distraught, having never missed timely payment of bills her whole life. I could see that the stress of her situation will simply kill her.
That's not what I told her though.
I told her to take some time and calm down, to ignore the collection calls, to stay as current on the mortgage as she is able, and to refer any lawsuits she might get to me. Now, I could see as I spoke to her that she was dumb to take such a large loan, and Wells Fargo was dumber to make it, but who is paying a higher price, the bank making billions or the little old lady crying in my office?
A partner with KPWS Law, P.C., (website http://kpws-law.com/ ), Eugene C. Kelley has spent years helping and working with people with legal and financial problems. For further reading and free advice, please visit http://getbackgroup.com/contact-us/. Financial problems are legal problems. Begin to constructively work out your problems today.
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