Housing

Wells Fargo Error Kicks 400 People Out Of Their Houses

Douglas A. McIntyre

Published: August 5, 2018 6:55 am

Last Updated: January 11, 2020 7:53 pm

Wells Fargo & Company (NYSE: WFC) managed to hammer another group of customers. After earlier charges which ranged from mortgage and auto loan abuse to banker creating fake accounts to boost bonuses, in a filed the bank said errors pushed 400 people out of their homes

The SEC filing stated:

An internal review of the Company’s use of a mortgage loan modification underwriting tool identified a calculation error that affected certain accounts that were in the foreclosure process between April 13, 2010, and October 20, 2015, when the error was corrected. This error in the modification tool caused an automated miscalculation of attorneys’ fees that were included for purposes of determining whether a customer qualified for a mortgage loan modification pursuant to the requirements of government-sponsored enterprises (such as Fannie Mae and Freddie Mac) and the U.S. Department of Treasury’s Home Affordable Modification Program (HAMP). Customers were not actually charged the incorrect attorneys’ fees. As a result of this error, approximately 625 customers were incorrectly denied a loan modification or were not offered a modification in cases where they would have otherwise qualified. In approximately 400 of these instances, after the loan modification was denied or the customer was deemed ineligible to be offered a loan modification, a foreclosure was completed. The Company has substantially completed its internal review, subject to final validation, of mortgages where an attorney fee-related error could have occurred. In second quarter 2018, the Company accrued $8 million to remediate customers whose modification decisions may have been affected by the calculation error.

Since Wells Fargo does not appear to have tracked what happened to these people, it is impossible to determine who badly their lives were affected. Suffice it to say, they were probably not better off than when their owned their homes. The $8 million comes too late to solve that.