Wells Fargo Admits 'Computer Glitch' May Have Contributed to 400 Foreclosures
from the scam-after-scam dept
Well shucks, it only seems like yesterday that Wells Fargo first found itself under fire for a cavalcade of fraudulent behavior.
First, the company was busted for creating 2 million unwanted accounts to saddle users with fees in order to meet quarterly numbers. From there, the company was subsequently caught hitting 110,000 customers with inaccurate “mortgage rate lock extension fees” to prevent them from being able to lock in better interest rates. Wells Fargo wagon was then caught forcing more than half a million customers into signing up for auto insurance they didn’t need, resulting in a number of those users defaulting on their loans or having their vehicles repossessed due to unnecessary added costs.
Apparently undaunted by the recently proposed $2.1 billion fine for the mortgage snafu alone, the company this week is making headlines once again. This time, Wells Fargo is under fire for hundreds of customers losing their homes due to an apparent computer glitch. According to the filing, the glitch was found in a mortgage loan modification underwriting tool and resulted in about 625 customers being “incorrectly denied” a loan modification, in turn resulting in about 400 of them being forclosed upon:
“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…
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.
In subsequent statements to the press, the company insisted it was “very sorry,” but, as has been its tendency, tried to downplay the connection between its screw up and people actually losing their homes:
“About 625 customers were incorrectly denied a loan modification or were not offered one even though they were qualified, according to the filing. In about 400 cases, the customers were ultimately foreclosed upon. Wells Fargo said in a statement that it was “very sorry that this error occurred” and said it was “providing remediation” to the affected customers. A spokesperson for the bank “there’s not a clear, direct cause and effect relationship between the modification” denials and foreclosures, but confirmed customers who were denied modifications lost their homes.”
Perhaps, but at the same time, you should probably look back upon the last two years’ worth of behavior by the company and include that in any mathematical determination of its trustworthiness or competence. According to a the same filing, the company revealed for the first time it’s also the subject of inquiries by more than one government agency into some potentially-shady behavior regarding tax credits attached to low income housing developments:
“Federal government agencies have undertaken formal or informal inquiries or investigations regarding the manner in which the Company purchased, and negotiated the purchase of, certain federal low income housing tax credits in connection with the financing of low income housing developments.”
If these are the scams and screw ups we know about, you have to wonder just how many haven’t been exposed yet. At some point you have to wonder how this particular company is still in business, since this hasn’t just been a few errant fuck ups. It has been a prolonged, active campaign of malice and incompetence, matched only by the company’s fairly obvious disdain for its own customers. At this point, it’s a company that’s starting to make similarly-hated monoliths like Comcast look like valued corporate citizens, and any conversations about more severe penalties are well earned.