Wells Fargo Computer Glitch Leads To Foreclosure of Nearly 400 Homes
According to a 10-Q filing with the U.S. Securities and Exchange Commission, Wells Fargo has set aside $8 million to compensate customers affected by an underwriting error. Approximately 625 borrowers qualified for mortgage loan modifications that may have improved their ability to make payments. Wells Fargo’s software denied these modifications, and approximately 400 of those borrowers ultimately lost their homes in foreclosure.
The error occurred between April 13, 2010 and October 20, 2015. The bank’s software included miscalculated attorney’s fees, which affected whether a loan qualified for the U.S. Department of Treasury’s Home Affordable Modification Program. Wells Fargo is now “providing remediation” for those affected by the error, but they have not said how the reparations will be distributed.
This information comes to light less than a week after the bank agreed to pay $2.09 billion in fines for a mortgage loan controversy. Wells Fargo allegedly sold loans with incorrect income information, which ultimately cost its investors billions of dollars. Nearly half of the accountholders defaulted on their loans during the Recession. The bank did not admit fault, but they are taking steps to move forward from past issues.