SAN FRANCISCO, Calif.—Oakland resident Sara Kershnar has been trying to get Wells Fargo bank to modify her home loan for two years.
After the bank allegedly lost some vital documents “three to four times,” Kershnar, began to think they were “negligent.” She began to get angry.
Kershnar had an opportunity yesterday few homeowners in her shoes get: She got to vent her anger and grill Wells Fargo CEO John Stumpf about the bank’s policy on foreclosures. She and about a half dozen other homeowners took a stand during the bank’s annual shareholder meeting in San Francisco.
The meeting took place immediately following a demonstration at Justin Herman Plaza, where hundreds of fed-up homeowners, renters, clergy and union organizers rallied to protest what many said were Wells Fargo’s unfair practices.
The crowd marched in the afternoon heat through San Francisco's Financial District to Wells Fargo’s headquarters on Montgomery Street, where the shareholders meeting took place.
Tuesday’s rally was one of a series of actions that will be held in May, and was the launching of a national campaign, The New Bottom Line, organized by a coalition of community, faith-based and labor organizing groups.
In addition to this protest at Wells Fargo, demonstrations are planned at the Bank of America shareholder meeting in Charlotte, N.C., on May 11, and at a JP Morgan Chase shareholder meeting in Columbus, Ohio, on May 17.
Among the campaign’s major demands is for Wells Fargo to “place a moratorium on all foreclosures until the bank negotiates with the coalition to establish comprehensive loan modification reforms.”
Another demand is to cease “illegal evictions of tenants in foreclosed properties.”
At the end of 2009, there were 350,169 Wells Fargo homeowners eligible for the Home Affordable Modification Program (HAMP). However, as of February 2011, only 77,402 of those homeowners received permanent loan modifications.
Wells Fargo also cancelled 118,697 trial loan modifications and has denied 175,336 eligible homeowners access to HAMP since 2009, according to a press release from organizers of Tuesday’s rally.
According to a bailout money overview study by Nomi Prins of the nonpartisan think tank Demos, Wells Fargo received an estimated total of $43.7 billion in federal bailout funds. The bank reported $12.3 billion in earnings last year.
At the shareholders' meeting, Kershnar pointed out that the bank is making a profit at a “time when families in the country are barely surviving.” She called Wells Fargo CEO John Stumpf’s annual compensation of $17 million “obscene,” at a time when families are hurting.
“It is not an issue of business, it’s an issue of ethics and should be an issue that all shareholders should be concerned about,” said Kershnar.
After a scandal last fall that exposed improper home foreclosures by some of the nation’s biggest banks, Bank of America, JP Morgan Chase and other banks issued moratoriums on foreclosures, while they reviewed their internal procedures. Wells Fargo did not.
Stumpf maintained that Wells Fargo has modified 700,000 loans and has forgiven $4 billion of shareholder capital to keep people in their homes. “I get it,” he said Tuesday. “There is a lot of pain.”
"It’s not pain. It’s exploitation,” responded Kershnar, adding that the bank intentionally gave out loans to homeowners, knowing that those loans would fail.
She charged that the bank has profited “obscenely” from servicing debt, affecting people’s ability to have a home, and feed and clothe their children. Hundreds of thousands of people are waiting for a home modification, Kershnar said.
Raleigh McLemore, a homeowner and teacher at Bancroft Middle School in San Leandro, echoed Kershnar’s concern. He, too, attended the shareholder meeting and was one of the protestors to be arrested.
McLemore said parents and other teachers at his school are reeling from the foreclosure crisis.
Often, he added, parents are too ashamed to talk about their foreclosure troubles. “There’s still a lot of silence,” McLemore said. “Suddenly, the student is gone.”
Stumpf said the HAMP program is just one option and that 80 percent of loan modifications occur outside of it.
“Foreclosures are not good for the housing market,” he said.
Stumpf reiterated, “We do not make profit on foreclosures." He went on, "We spend a lot of resources to help people stay in their homes.”
According to information in the shareholder proxy materials, citing an estimate by Morgan Stanley, “9 million U.S. mortgages that have been or are being foreclosed on may face challenges over the validity of legal documents.”
Campaign organizers and supporters aren’t the only ones putting pressure on banks. This year’s proxy included one item introduced by the New York City Office of Comptroller on behalf of pension funds of teachers, firefighters and police officers.
The campaign's shareholder resolution calls for an independent review of Wells Fargo’s mortgage processing and foreclosure policies to ensure that it complies with federal regulations.
However, Well Fargo’s board recommended against the resolution, saying multiple audits of the bank’s foreclosure processes have already been completed by federal regulators and the bank itself.
But Kristina Bedrossian, with the Coalition Reinvestment Committee, who played a role in organizing yesterday's event, believes the “resolution is critical because the public and shareholders do not have access to Well’s internal audit of its processes.”