Wells Fargo & Co. will increase salaries for its CEO and three other top executives, the Associated Press reported Aug. 6. The salary increases are not in salary, but in company stock, which cannot be issued until the bank repays the money it was lent by the federal government under last fall's Troubled Assets Relief Plan. The pay increases mean Wells Fargo CEO John Stumpf now will receive $4.7 million in stock along with a $900,000 salary; other executives will receive $2.2 million to $3.3 million in stock along with salaries of $600,000 to $700,000. Wells Fargo said it had to raise the compensation to bring it in line with compensation at other banks.
The pay increases are a politically sticky issue for Wells Fargo because it received $25 billion in federal funds last year through TARP. Wells Fargo was one of the banks that said it didn't need the TARP money, but was required to accept it by the federal government, to avoid a consumer panic. However, the bank has since bought a rival, Wachovia, which it said was responsible for its inability to pay the money back in June. Wells Fargo and Wachovia are also among the worst of the mortgage lenders recently accused of dragging their feet at making mortgage loan modifications. According to a Treasury Department report issued the same week, Wells Fargo has modified just 6% of loans eligible for a modification under the Making Home Affordable plan; Wachovia has modified just 2%.
As Corona loan modification attorneys, we cannot help but notice that Wells Fargo -- and other banks with similar executive compensation -- frequently denies loan modifications and fights other pro-consumer measures because they would reduce profits. While banks are free to pay their employees however they like, within legal limits, drastically overpaying executives also reduces profits, and with less benefit to the housing market or even the business itself. A loan modification may cost several tens or hundreds of thousands of dollars, but a foreclosure will also cost the bank money -- and keep housing prices depressed, hurting the bank's business and everyone else's. Our Vista loan modification lawyers believe the priorities implied by these compensation decisions are ultimately bad for the bank, the economy and of course, mortgage borrowers.
Howard Law has an active practice helping homeowners secure loan modifications that can keep them out of foreclosure. We believe our status as Pico Rivera loan modification lawyers helps us get the banks' attention, even when homeowners themselves have not had good luck, precisely because we are attorneys. When lawyers call, banks pay attention because they know that they may soon be hit with a lawsuit. In fact, we carefully review clients' records for evidence of predatory lending and use that evidence when we find it as leverage to get clients the best loan workout. We strive to leave clients with a meaningful loan modification that actually lowers their payments and keeps them realistic for the long term.
If you've been fighting foreclosure on your own and you know you need help, you should call Howard Law right away for a free, confidential consultation. To set one up, you can reach us through the Internet or call 1-800-872-5925.