Hundreds of people mistakenly had their homes foreclosed upon because Wells Fargo software incorrectly denied them mortgage modifications, the bank indicated in published reports.
What is being done?
The revelation happened last week through a regulatory filing by the bank, reports stated. Wells Fargo also indicated it has set aside $8 million to compensate customers affected by the so-called glitch.
Also in the filing, it was disclosed that Wells Fargo is under government investigation for the financing of low-income housing developments, CNN reported.
According to reports, Wells Fargo stated that a computer error affected certain accounts that were in the foreclosure process between April 2010 and October 2015. Then the issue was reportedly corrected.
In all, an estimated 625 customers were incorrectly denied a loan modification or were not offered one even though they were qualified, the report stated. About 400 customers had their homes foreclosed upon.
Wells Fargo did not respond to a request for a comment, CNN reported.
A string of scandals has cost Wells Fargo billions of dollars, along with multiple lawsuits and investigations.
The Justice Department recently announced that Wells Fargo will pay a $2.1 billion fine for issuing mortgage loans that it knew contained incorrect income information, the report stated.
The loans impacted the 2008 financial crisis that crippled the global economy, CNN noted.
In June, the federal Securities and Exchange Commission accused the bank of “using complex financial investments to take advantage of mom-and-pop investors,” according to CNN. Wells Fargo has reportedly neither admitted nor denied the SEC’s allegations and is cooperating with the investigation.
Yet another scandal for the bank involved the creation of millions of fake accounts used to boost sales figures. The scope of the problem has expanded since it was first revealed in September 2016, the report stated.
Wells Fargo has also admitted to giving customers unfair mortgage fees and charging people for car insurance they didn’t need.