As a customer of Wells Fargo (I also have a home loan with them), I am very concerned about the billions of dollars the administration is coercing out of the banks to fix the housing crisis.
Banks are in the business to make money. I foresee extra fees and add-ons to their customers, reduced interest on our savings and other ways they will use to make up for this lost revenue. For these banks, 99 percent of their customers will suffer because of the 1 percent. Oops – that is not the politically correct “1 percent” to be upset about.
Wells Fargo and the federal government better get ready for a class-action lawsuit. If a bank offers a $20,000 principal reduction on a few mortgage loans, they need to do it on every loan they service. For example, let’s say my neighbor and I each have an $80,000 loan. I work two jobs to make my payments, scrimp on going out to eat and forgo vacations. After a few years, I now owe $63,000. My neighbor doesn’t make house payments, buys a nice car, spends money wastefully and still owes the bank the full $80,000.
Now Wells Fargo is going to reward them, reduce their debt to $60,000 and give them a better interest rate. The bank’s 99 percent of good customers will be very, very upset, and will need to take action.