Wells Fargo & Co’s (NYSE: WFC) CEO John Stumpf said that he knew what distressed homeowners are going through and admitted that he too had been “underwater” on his own mortgage during the company’s first quarter conference call.
“There have been times in my life I have been upside down on a mortgage, and if you give people a job, they want to stay in their home, they pay,” Stumpf told analysts.
“I actually grew up as a collector and the things that cause delinquency, and frankly loss, are the same things that were there 35 years ago when I started, and the biggest issue there is unemployment,” Stumpf said. “If people have a job, they want to and tend to pay their bills. So what causes loans to go into a delinquency situation typically is, if you want the big four, it is death, divorce, unscheduled medical payment and a lack of a job. And lack of a job is the big one.”
Stumpf cited his own personal experience in order to dismiss concerns that homeowners will stop paying their home-equity loans when their total mortgage debt exceeds the value of their homes.
