Miscalculation By Wells Fargo Costs Customers Their Homes
Wells Fargo says the bank incorrectly denied loan modifications to 870 customers. That's close to 250 more customers than previously believed - and of them, more than half lost their homes due to the mistakes.
The bank disclosed in a securities filing that about 870 qualified customers were denied or not offered loan modifications or repayment plans on their mortgages. The original estimate in August was 625.
Of the 870 customers, 545 ultimately lost their homes due to foreclosure, up from the previous estimate of 400.
The previously identified accounts were in the foreclosure process between April 13, 2010 and October 2, 2015 when the first error was corrected.
Wells Fargo says an expanded internal review of a mortgage loan identification underwriting tool identified a related calculations error. The newly identified accounts were in the foreclosure process from March 15, 2010 to April 30, 2018.
The bank says it has contacted most of the customers affected by the error in order to provide remediation and offer no-cost mediation. It has not ruled out finding other problems and continues to work to determine any other harm to customers.
In August, Wells Fargo set aside $8 million to help customers impacted by the error, to provide an average of $12,800 per customer. The bank hasn’t said if it will set aside more after identifying the 250 additional customers.
Wells Fargo has said that, in its ongoing review, it is possible that other similar instances will be found.