Wells Fargo, with its already long-list of consumer abuse scandals, admits it improperly foreclosed more homes than it previously reported due to a “calculation error.”
Continue Reading Below
After an internal review, the troubled bank said it found that 870 customers were erroneously denied mortgage changes, with 545 of them losing their homes as a result of the error. The bank first reported the mistake in August, but said only 645 eligible borrowers were denied and of those, 400 lost their homes. The bank added that it had fixed the glitch and put $8 million aside to compensate borrowers this summer, but it hasn’t updated that number since admitting more customers have been impacted.
Reuters, which first reported the news, cited an underwriting error that internally prompted the bank to reject home loan modifications instead of helping them.
In an email to FOX Business, Tom Goyda, a Wells Fargo spokesperson said: “We’re very sorry that the errors occurred and have assigned a single, dedicated point of contact to ensure that each customer is engaged with and assisted individually.”
While the internal inquiry is still ongoing, the bank said it has contacted a majority of those impacted to provide remediation. The error now includes customers who were involved with the foreclosure process from March 15, 2010 through April 30, 2018.
The latest revelation comes weeks after the country’s third-largest bank announced it has put two key executives on leave as investigations roll on into the bank’s retail sales practices.
Hope Hardison, the bank’s chief administrative officer, and David Julian, its chief auditor, were both placed on a leave of absence and were removed from the bank’s operating committee, the company said in late October.
While the San Francisco-based bank wouldn’t elaborate on the reason for the abrupt moves, it continues to cope with the fallout from a 2016 scandal in which millions of fake accounts were created by its bankers over the years to meet sales targets.
Last month, the bank settled with the New York attorney general’s office for $65 million over allegations it misled investors about its sales practices.
Wells Fargo CEO Tim Sloan said the two executives being placed on a leave of absence reflects the company’s commitment to make things right for its customers. Since 2016, seven of the 10 members of Wells Fargo’s operating committee have left the company.