In a report released on August 3, 2018, Wells Fargo admitted that the bank’s internal computer systems found a flaw in the calculation. The bank’s mistake impacted 625 mortgage modifications submitted by struggling homeowners from April 2010 to October 2015.
An error in the underwriting tool used for calculating owners’ eligibility for the Home Affordable Modification Program, is responsible for the falsely rejected applications. The miscalculation consisted in adding higher attorney fees to the mortgage amount, making it unaffordable to the homeowner, which lead to the denial of the modification request and in many instances to the loss of the home between April 13, 2010 and October 20, 2015.
The bank states that the glitch was discovered and corrected in 2015, however, the affected individuals were not informed about it at the time. It is reported that $8 million has been set aside for customers impacted by the miscalculation.
Tom Goyda, a spokesman for Wells Fargo, stated that the Wells Fargo has always worked with customers to help them remain in their homes when encountering financial difficulties. He also mentioned that since 2009 more than 1 million mortgage modifications have been completed by the bank.
Homeowners Afflicted by the Wells Fargo Error
Those displaced from their homes will not be able to find much relief in the minimal compensation amount that will be offered by Wells Fargo. The estimated $12,800 per customer does not compare to the significant financial and emotional impact one experiences when losing a home.
Wells Fargo’s Previous Scandals
This is not the first time Wells Fargo has transgressed. In 2016, the bank was fined $185 million for opening unauthorized credit and bank accounts on behalf of customers. Additionally, a $1 billion fine was imposed upon the bank by the Consumer Financial Protection Bureau in April 2018 due to missteps in their regulatory compliance.
Hiring an Attorney for Loan Modifications
For homeowners seeking a loan modification, hiring an experienced attorney to manage the process affords additional insight and strategy to achieving a restructuring of the current home loan. Contact Graham Legal to find out if a modification if the right option for you.