Wells Fargo says hundreds of customers lost homes after computer glitch

Hundreds of people had their homes foreclosed on after software used by Wells Fargo incorre...

Posted: Aug 6, 2018 6:47 AM
Updated: Aug 6, 2018 6:47 AM

Hundreds of people had their homes foreclosed on after software used by Wells Fargo incorrectly denied them mortgage modifications.

The embattled bank revealed the issue in a regulatory filing this week and said it has set aside $8 million to compensate customers affected by the glitch.

The same filing also disclosed that Wells Fargo is facing "formal or informal inquiries or investigations" from unnamed government agencies over how the company purchased federal low-income housing tax credits. The document states the probes are linked to "the financing of low income housing developments," but does not offer further details.

Reuters first reported news of investigations and mishandled mortgage modifications on Friday.

Wells Fargo said the computer error affected "certain accounts" that were undergoing the foreclosure process between April 2010 and October 2015, when the issue was corrected.

About 625 customers were incorrectly denied a loan modification or were not offered one even though they were qualified, according to the filing. In about 400 cases, the customers were ultimately foreclosed upon.

Wells Fargo said in a statement that it was "very sorry that this error occurred" and said it was "providing remediation" to the affected customers.

A spokesperson for the bank "there's not a clear, direct cause and effect relationship between the modification" denials and foreclosures, but confirmed customers who were denied modifications lost their homes.

Related: Wells Fargo to pay $2 billion fine in mortgage settlement

Wells Fargo has been mired in a series of scandals in recent years that have cost the firm billions and left it facing a string of lawsuits and investigations.

Earlier this week, the Justice Department announced Wells Fargo agreed to pay a $2.1 billion fine for issuing mortgage loans it knew contained incorrect income information. The government said the loans contributed to the 2008 financial crisis that crippled the global economy.

In June, Wells Fargo was accused by the federal Securities and Exchange Commission of using complex financial investments to take advantage of mom-and-pop investors. Wells Fargo, which neither admitted nor denied the SEC's allegations, said at the time it "cooperated fully" with the SEC probe.

One of its most far-reaching scandals involved the creation of millions of fake accounts the company created for unsuspecting customers in order to boost its sales figures. The scope of that issue ballooned since the practice was first uncovered in September of 2016.

The bank has also admitted to hitting customers with unfair mortgage fees and charging people for car insurance they didn't need.

— CNN's Julia Horowitz and Matt Egan contributed to this report.

West Lafayette
Cloudy
54° wxIcon
Hi: 60° Lo: 54°
Feels Like: 54°
Kokomo
Cloudy
54° wxIcon
Hi: 62° Lo: 53°
Feels Like: 54°
Rensselaer
Cloudy
54° wxIcon
Hi: 54° Lo: 51°
Feels Like: 54°
Fowler
Cloudy
54° wxIcon
Hi: 55° Lo: 51°
Feels Like: 54°
Williamsport
Cloudy
54° wxIcon
Hi: 58° Lo: 53°
Feels Like: 54°
Crawfordsville
Cloudy
54° wxIcon
Hi: 61° Lo: 53°
Feels Like: 54°
Frankfort
Cloudy
54° wxIcon
Hi: 62° Lo: 53°
Feels Like: 54°
Delphi
Cloudy
52° wxIcon
Hi: 62° Lo: 54°
Feels Like: 52°
Monticello
Cloudy
52° wxIcon
Hi: 63° Lo: 54°
Feels Like: 52°
Logansport
Cloudy
52° wxIcon
Hi: 62° Lo: 52°
Feels Like: 52°
Cooler, gray weather with spits of rain...
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 1003647

Reported Deaths: 16423
CountyCasesDeaths
Marion1351072116
Lake661851159
Allen57674800
Hamilton46217464
St. Joseph44210611
Elkhart35807508
Vanderburgh32162480
Tippecanoe27859258
Johnson25007444
Hendricks23795357
Porter22856365
Madison18694408
Clark18505252
Vigo17393303
Monroe15218199
LaPorte15101250
Delaware15024261
Howard14681289
Kosciusko12260147
Hancock11682175
Bartholomew11548180
Warrick11270189
Floyd11059214
Wayne10946253
Grant10019219
Morgan9438176
Boone8891116
Dubois8249131
Dearborn819893
Henry8174152
Noble8003106
Marshall7891135
Cass7519121
Lawrence7433171
Shelby7171119
Jackson695889
Gibson6567115
Harrison646691
Huntington636899
Knox6360106
DeKalb628699
Montgomery6229109
Miami591498
Putnam577678
Clinton572171
Whitley563455
Steuben558976
Wabash5309103
Jasper527879
Jefferson509297
Ripley498686
Adams479775
Daviess4653114
Scott438473
Greene423596
Wells422588
Clay421360
White417364
Decatur4152102
Fayette405787
Jennings385961
Posey375844
Washington356150
LaGrange356078
Randolph343499
Spencer338743
Fountain333860
Sullivan327852
Starke315570
Owen313970
Fulton309167
Orange292663
Jay283445
Franklin265143
Perry264852
Rush260832
Carroll260633
Vermillion257254
Parke230426
Pike228443
Tipton227259
Blackford191841
Pulaski183157
Crawford159023
Newton156848
Benton150217
Brown145747
Martin138019
Switzerland134811
Warren120816
Union107016
Ohio84213
Unassigned0540

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events