Wells Fargo: Computer Glitch Denied Loan Modifications To Hundreds Of Homeowners
LOS ANGELES (CBSLA/AP) — Wells Fargo says a computer glitch contributed to hundreds of foreclosures because it miscalculated customers' eligibility for mortgage modifications.
The bank said in a filing the error caused about 625 customers to be denied, or not offered, loan modifications they otherwise qualified for. Foreclosures were completed in about 400 of the cases.
The customers had been using federal programs that helped families at risk of losing homes. Spokesman Tom Goyda says there's no breakdown of where the foreclosures occurred.
The error in the bank's underwriting tool lasted from 2010 until it was fixed in late 2015, an internal review found.
The bank said it set aside $8 million this year to help the affected customers.
It's the latest in an onslaught of bad news for the San Francisco-based bank. Just last week, Wells Fargo was hit with a $2.1 billion fine to settle allegations it misrepresented the types of mortgages it sold to investors during the housing bubble that ultimately led to the 2008 financial crisis.
And earlier this year, federal authorities fined the bank $1 billion for charging customers unfair fees in April, just four months after yet another computer glitch drained customers' accounts.
(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
