Wells Fargo blamed a calculation error for resulting in foreclosures on hundreds of homeowners who instead should have been helped by the bank. The finance giant acknowledged this week that it had improperly foreclosed on 545 distressed homeowners after they had requested assistance with their mortgages.
In total, Wells Fargo said 870 homeowners were wrongly denied help. More than half of that total ended up losing their homes.
An internal review by Wells Fargo led to the discovery of the accidental foreclosures from 2010 up until last April.
“It is really astounding that it has taken so long to find these problems, and it is not at all clear that this is the end of it,” Alys Cohen, staff attorney for the National Consumer Law Center, told The Washington Post. “A homeowner in distress deserves better. Why don’t we know more about how this happened? And where are the regulators ensuring that homeowners get fully compensated?”
Wells Fargo initially said it would set aside $8 million, or about $12,800 per customer. But the number of customers affected has grown since the lender first reported the incident. A “substantial majority” of borrowers already have been contacted and will be offered “remediation,” Wells Fargo has said publicly.
“This effort to identify other instances in which customers may have experienced harm is ongoing, and it is possible that we may identify other areas of potential concern,” Wells Fargo said in its Securities and Exchange Commission filing.
Wells Fargo’s admission follows a series of other issues that have plagued the mortgage giant. In recent months, Wells Fargo has paid more than $1 billion in fines to settle disputes over accounts that were opened for people who never asked for them and to settle disputes over the repossession of thousands of cars from its borrowers.