Hundreds of families are facing home foreclosure due to a glitch in Wells Fargo’s computer system in which their software incorrectly denied mortgage modifications, according to CNN Money. The bank has promised to set aside $8 million dollars to compensate the 625 families who were denied a loan modification or not offered one that they were qualified for, 400 of which were eventually foreclosed upon.
The same filing reports that Wells Fargo faces “formal or informal inquiries or investigations” from unnamed government agencies regarding its federal low-income housing tax credit purchases.
The accounts facing foreclosure belong to customers that undergoing the foreclosure process between April 2010 and October 2015. “There’s not a clear, direct cause and effect relationship between the modification,” claimed the bank’s spokesperson who confirmed customers who were denied modifications lost their homes. The bank has released a statement saying that they are “very sorry” for occurrence of such an incident.
Wells Fargo promises they are making efforts to remedy the situation, but this error comes as another in a long line of detrimental mistakes that have caused the financial giant to lose money and have to face lawsuits and investigations.
The company recently agreed to usurp $2.1 billion to compensate for issuing mortgage loans it knew contained incorrect income information, a scandal thought to contribute to the 2008 financial crisis, according to the United States Justice Department. They have also been accused of taking advantage of small business investors through complex financial investments, creating millions of fake accounts to boost sales figures in 2016, and hitting customers with unfair mortgage fees and charging people for car insurance they didn’t need.
The federal Securities Exchange Commission is leading the charge against Wells Fargo’s alleged exploitation of “mom-and-pop investors,” but the bank has yet to admit to such practices, claiming that they are “cooperating fully” with the SEC’s investigations.
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