Computing error in Wells Fargo mortgage tool causes loss of homes
The company is working to remedy this egregious mistake.
It turns out a specific glitch in one of Wells Fargo's tools caused roughly 400 people to face foreclosure. A mortgage loan modification underwriting tool caused about 625 customers to be denied loan changes or offers when they otherwise would have qualified and, due to this, around 400 Wells Fargo customers lost their homes.
Engadget reports that the discovery was revealed via an SEC filing from the bank and also shared that the company was recently fined for issuing mortgage loans with incorrect income data, adding to a string of other transgressions in recent years. The mortgage error affected accounts between April 2010 and October 2015.
Wells Fargo told CNN Money that it is "providing remediation" to affect customers, but it's not clear what the scope of this remediation will be. Stay tuned to Shacknews for additional updates.
-
Shacknews
replyCharles Singletary posted a new article, Computing error in Wells Fargo mortgage tool causes loss of homes
-
Will this actually be followed up upon? Like can we expect updates in the future? I'm honestly curious about this story.
-
-
Awesome, thank you!
-
-
-
[deleted]
-
How would that even work?
You're up-to-date on your mortgage payments, and suddenly they say you're being foreclosed on and have to get out? Who would even accept that?-
No, they were late on payments and eligible for a modification but the computer was running the math wrong.
This was a mistake driven by not putting enough resources into validations on production systems, not a cynical attempt to maximize earnings.
-
-
This article is in desperate need of a clear example of what actually happened to the affected customers.
-
It's taken from their 10Q filed Friday, in the "Additional Efforts to Rebuild Trust" section.
https://www.sec.gov/Archives/edgar/data/72971/000007297118000408/wfc-06302018x10q.htm
"Mortgage Loan Modifications 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."
-
-
