SEVERE WX : Wind Advisory - High Wind Warning View Alerts

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 3:47 AM
Updated: Aug 6, 2018 3:47 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.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 354681

Reported Deaths: 4235
CountyCasesDeaths
Multnomah55528700
Washington38530317
Marion36621448
Clackamas29551307
Lane27511300
Jackson22911308
Deschutes20066125
Umatilla14401146
Linn12732127
Douglas12019243
Josephine9334196
Yamhill8645111
Klamath7898116
Polk729981
Malheur559576
Benton543531
Coos498094
Columbia378143
Jefferson370752
Union317348
Lincoln317238
Wasco286540
Crook283546
Clatsop243229
Baker201528
Tillamook195929
Hood River191637
Morrow184023
Curry179825
Harney112126
Grant99513
Lake91812
Wallowa68312
Gilliam1534
Sherman1503
Wheeler1121
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 4835022

Reported Deaths: 71032
CountyCasesDeaths
Los Angeles148065626473
Riverside3708005020
San Diego3656704178
San Bernardino3577115627
Orange3237885538
Sacramento1589272303
Kern1455891632
Fresno1455032073
Santa Clara1452251898
Alameda1204021391
San Joaquin1024051721
Ventura1008821166
Contra Costa997401004
Stanislaus858701326
Tulare79709958
San Francisco54299645
San Mateo54046622
Monterey50815583
Solano45958341
Santa Barbara45074522
Merced42144580
Sonoma40895402
Placer39222424
Imperial35906764
Kings32708322
San Luis Obispo29863332
Madera23761285
Butte23726268
Shasta23637349
Santa Cruz20962218
Yolo20275248
Marin17674244
El Dorado17123149
Sutter13873174
Napa12871100
Yuba1003382
Tehama9448108
Humboldt9195108
Nevada912990
Mendocino760087
Lassen754347
San Benito742772
Tuolumne685589
Lake6593104
Amador542964
Siskiyou447046
Glenn435233
Calaveras387280
Del Norte357642
Colusa303318
Inyo208040
Mono16673
Plumas16198
Mariposa132815
Trinity87211
Modoc6795
Unassigned2260
Sierra1840
Alpine1030
Out of CA00
Medford
Partly Cloudy
45° wxIcon
Hi: 68° Lo: 43°
Feels Like: 42°
Brookings
Partly Cloudy
56° wxIcon
Hi: 61° Lo: 49°
Feels Like: 56°
Crater Lake
Mostly Cloudy
46° wxIcon
Hi: 49° Lo: 27°
Feels Like: 46°
Grants Pass
Cloudy
45° wxIcon
Hi: 68° Lo: 45°
Feels Like: 42°
Klamath Falls
Mostly Cloudy
47° wxIcon
Hi: 57° Lo: 39°
Feels Like: 41°
More wind and rain
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events