Wells Fargo Goes On The Offensive – Incentive Intelligence Applauds

I think it is a little more complex than this. While I (and likely most of the receipients of the blog)wholly encourage incentives and believe the individuals generally should be rewarded, the challenge is the behavior for which they earned the reward.
Mortgage originations, using the old criteria, are not in the best interests of the company nor the country. The employees did what they were told and excelled. Unfortunately, the leadership erred in establishing the behaviors and the goals. Granted, it is not the fault of the employee but it is still difficult to accept rewarding behaviors and performance that, ultimately, was extremely damaging.
I believe I am aware of the program (and it was once ran by a major Minneapolis performance improvement company). The literature stated the very lax rules of $0.00 down, no income verification, etc. These were mortgages that we now know as toxic.
Again, its hard to reward the excellent employees that were led astray. Not to be too dramatic but analogously, I wouldn’t imprison the German foot soldier following Nazi command but I certainly couldn’t condone awarding medals of conduct for following orders either.

Although I am not a Wells originator that is affected by this cancellation, I am outraged to hear such a general comment like “Mortgage originations, using the old criteria, are not in the best interests of the company nor the country”. And even more outrageous is that you imply that “damaging behavior is being rewarded”.
I am a 20yr veteran of the mortgage industry that works 65+ hours per week to ensure my clients are getting the best possible service and programs to meet their needs. I also was fortunate enough to attend one of the awards meetings a few years back and I assure you it was not a result of anything damaging to my clients, my company or my country. I have always been honest with my clients and have never had any problem guiding them away from a program that could have been damaging to them.
In every industry there are practices and people that unfortunately do not always have the best interest at hand but I am tired of hearing how it is the loan officers and the bad loans that have put this economy where it is. You give us far too much power!
Instead of playing into the hands of the media and thinking that stated income or 100% loans took down the country – we might instead consider all the many factors that have brought this country to the state it is. Most of these by the way – have nothing to do with the mortgage industry.
In addition, I would encourage you to consider the multitude of homeowners that ARE NOT in foreclosure that were fortunate enough to have had a special program that met their needs and allowed them the priveledge of owning a home. I personally fall into that category and have never been 30days late or defaulted on my mortgage. In the same respects, I and many others will struggle under the “new” mortgage guidelines should we want to purchase another home in the future.
As Paul stated – sooner or later we have to make the borrowers accountable for the decisions they made. Like many of the people you read about – my partner suffered a heart attack followed by the loss of nine months of income. In addition to the mounting medical bills, I was the subject of mortgage layoffs from two seperate companies as well as suffered aprox. six additional months of reduced income as a result of my own medical problems. This was only the surface of our hardships. As many times as I could have thrown in the towel, filed bankrutpcy and turned over the keys to my home – I did not!!! We sacrificed, scrimped, cut back and did what was necessary to get us through the rough times. This included selling our home for a loss in a declining market(not a short sale)and we continue to pay on the remaining balance as we promised when we signed our original note & mortgage.
I realize there are instances when a person simply can no longer maintain the cost of their home. But I truelly believe that as long as the media keeps up the hype and everyone keeps blaming it on the mortgage industry instead of holding the borrowers accountable – then the foreclosures will continue and the numbers will get larger. We are creating an environment where the word “foreclosure” is no longer taboo but rather an everyday – expected way of handling our mortgages. All of the media publicity is doing is making a foreclosure seem “normal”.
Thank you for you time!

Mary,
I certainly did not mean to undermine the efforts and performance of the loan originators at Wells Fargo, or anywhere else. Just the contrary. Those scheduled to be honored at Las Vegas excelled at their position and performed extraordinarily . Nor am I criticizing the decisions of Wells’ mid-managers, senior managers or executives to promote these loans. At the time, I am sure it was it was a well thought out decision.
Nor do I “blame” the buyers necessarily. I have two adult-age sons in California who agonized over buying a home the last couple of years. With escalating prices they believed they had to purchase or forego home ownership forever. Thank goodness they did not. But if they had, they would be straddled with a mortgage over a hundred thousand dollars greater than the value of their homes. Tough decision not to walk away when you’re 30 years old.
Blame was not my intent. In one regard, I agreed with Paul that the originators exceeded their job expectations and should be awarded appropriately. But in this circumstance I posed the question of whether reward is, in fact, appropriate.
I’m not sure what the right decision is.
I would like to think of this as “the Perfect Storm” where everything came together for a catastrophe. But it does give me pause. As I write this, I’m thinking that there is someone out there who did one heck of a job selling peanut butter.

SJD – thanks for the comment. Here’s the problem in a nutshell. In many cases the programs that are referenced are not simply “a minority of people (almost always in sales) who take it over the top” but programs that are avilable to ALL employees – the travel portion is simply the top of the pyramid of awards. Many of the 281,000 you referenced were eligible for monthly or quarterly awards as part of the all-employee recognition program. The travel award referenced in the article may have been just one of many awards offered. I can’t tell for sure without getting into WF specific structures but that is how the majority of these are structured. It is a misnomer today to think that sales is the only department that is eligible for these awards. Most companies have adopted an all-employee mindset since company performance is the result of all departments doing a great job – not just one.
No one would say that we shouldn’t do an honest day’s work for for an honest day’s pay – but were talking about “above and beyond” stuff here. Stuff that is required to remain a viable company – and more important now if we truly believe they are “too big to fail” – but that is a different discussion.