During the second general session at the Mortgage Bankers Association's (MBA) 98th Annual Convention & Expo in Chicago Monday, a pair of protesters with conference badges targeted their criticism toward Wells Fargo Home Mortgage President Michael J. Heid.
The protesters, presumably connected to the Occupy Wall Street movement that marched through downtown Chicago Monday, blamed Wells Fargo's foreclosure policies for declining home values in the city, as well as for the displacement of borrowers.
Heid was one of four CEOs who spoke during the afternoon session, which was moderated by MBA President David Stevens.
The protesters' comments came after the panelists finished their presentations and Stevens opened the floor for questions.
The first protester to reach the microphone in the Chicago Hyatt Regency's grand ballroom said that Wells Fargo and US Bank were two of the top drivers of foreclosures in the city. (US Bank Home Mortgage President Daniel A. Arrigoni was also part of the panel, though both protesters directed their questions toward Heid.)
The protester, an unidentified man, stated that Wells Fargo's mortgage business has contributed to lost equity in the community, particularly in minority neighborhoods. After reading a lengthy statement off a sheet of paper, the man asked Heid how he could "show his face" in Chicago.
In response, Heid pointed to Wells Fargo's foreclosure-prevention efforts, including the opening of homeownership centers in various U.S. cities. He stated that loan modifications at the bank outnumber foreclosures by a two-to-one ratio. Heid also commented that, despite servicers' best efforts, some borrowers cannot be saved from foreclosure. His response prompted applause break No. 1.
One question later, another protester, an unidentified woman, asked Heid about his moral compass. Heid again emphasized loan modifications and stated that it is a goal to prevent as many avoidable foreclosures as possible.
He also said that Wells Fargo, unlike many other originators, largely avoided toxic loan products. He stated that the loan modification process can be complicated for borrowers but further noted that borrowers must have a desire to remain in their homes and a willingness to work with servicers. That sparked applause break No. 2.
Stevens additionally explained that Wells Fargo has acquired several major lenders that dabbled in high-risk products but that the bank itself mostly steered clear of such loans during the boom years.
The protesters' questions came shortly after comments from Heid that the mortgage industry should avoid the temptation to fight regulation where it is appropriate. Instead of being on the defensive about what has been done wrong, Heid encouraged the audience to share stories about modification successes and improved origination quality.
‘Building a thicker skin is just one of the more practical responses to the here and now,’ he said, pre-protesters.