Homeowners’ homes foreclosed on after Wells Fargo’s software incorrectly denied available mortgage modifications
News sources have revealed that more than 600 Wells Fargo customers were incorrectly denied loan modifications under a federal assistance program set up by the Treasury Department in 2009, with 400 of the owners ultimately losing their homes to bank foreclosure. The bank claims the loan adjustment denials were the result of a “computer error.”
That error affected certain accounts that had been undergoing the foreclosure process between April 2010 and October 2015. The homeowners were incorrectly denied loan modification or were not offered the modifications even though they were qualified. Wells Fargo says it has set aside $8 million to try to compensate customers who it admitted lost their homes as victims of the “computer error.”
Thomson Reuters notes that “The new disclosures add to Wells Fargo’s numerous regulatory penalties, private lawsuits and remediation efforts. Most stem from a sales practices scandal that has touched on all of the bank’s major business units.”
The bank has come under major scrutiny in recent years for a myriad of large-scale scandals that have cost the bank billions in fees and penalties, including creating millions of fake accounts to boost sales figures, hitting customers with unfair mortgage fees, and charging customers for unwanted and unconsented auto insurance.