Who better to tell us how to “get housing right” than the head of Wells Fargo Home Loans! Surely Mike Heid would have no conflicts of interest and would solely have the benefit of the homeowner in mind.
• In the short-term, I believe it is critical to end uncertainty about rights and responsibilities between market participants. Simultaneously, we need to work hard to find long-term bipartisan solutions to restructure the housing finance system in America.
• Washington did the right thing in setting up HARP – a national program that ensures all servicers know the rules in refinancing underwater loans. We need to give this program – and others – time to work. I would urge caution when considering whether additional housing programs are necessary at this time.
• Finally – and perhaps most importantly – regulators need to strike the appropriate balance between risk management on the one hand and giving more consumers a better chance to get loans on the other.
Let’s translate this, shall we:
• Let’s not obsess over who owns what and who forged and falsified what loan documents. We’re friends, right?
• The HARP program where we can trap borrowers into higher interest rates and make lots of money in closing costs works great for us! Don’t get crazy with principal reduction or eminent domain or HOLC-type plans. We’re good.
• You don’t want homeowners not to be able to access our fine products, do you? No? Then leave us alone.
That about covers it.
Heid casually mentions that he and some of his other servicer pals recently strolled over to the White House to brief executive staff, HUD and Treasury officials on housing policy. The door is still open for these people after they had to sign a $25 billion settlement over their servicing misconduct, which is ongoing, by the way. Heid describes the settlement as industry “working together” with regulators to find a solution, and he’s right. That’s what “accountability” looks like in this era.
Here’s who we’re talking about when we talk about Wells Fargo: [cont’d.]