Wells Fargo bank said on Tuesday that an internal computing error led to the foreclosure of more customes' homes than originally thought. File Photo by Kevin Dietsch/UPI |
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Nov. 7 (UPI) -- Wells Fargo apologized for an internal computing error that cost about 545 mortgage holders their homes.
The San Francisco-based bank, which offers mortgage loans across the company, said Tuesday in a new disclosure that about 870 customers undergoing foreclosure proceedings were incorrectly denied modifications to their loans or changes in their repayment plans. About 545 of those customers lost their homes, the bank said in its quarterly 10-Q filing to the Securities and Exchange Commission.
The bank first reported the error in August, but its new information indicates the error, and the aftermath of customers losing their homes, were more widespread than earlier reported. In August, it said it had fixed the error and set aside $8 million to compensate those affected, but the dollar figure has not been increased since the new foreclosure incidents were reported.
"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," the filing said in part. The foreclosures took place between 2010 and 2015.
"We are sorry that these errors occurred," Wells Fargo spokesman Tom Goyda said. The bank said it is attempting to contact the customers to offer remediation. In the filing, the bank suggested more problems could be uncovered.
"The company's review of these matters is ongoing, including a review of its mortgage loan modification tools," it said.
The admission by Wells Fargo is its latest disclosure of a violation of banking laws. Federal investigations and regulatory restrictions have continued since a major 2016 scandal in which Wells Fargo sales agents were accused of creating millions of unauthorized customer accounts to meet sales goals. Since then, the bank has also disclosed harm to customers in its foreign exchange and wealth management programs, and in sales of add-on products like identity theft protection.
Wells Fargo said it has adopted steps to change its practices, and has launched a new advertising campaign to repair its image.
In a U.S. Senate banking committee hearing in October, the Office of the Comptroller of the Currency said it was not satisfied with Wells Fargo's compliance actions. The regulator ordered the bank to provide restitution to customers. In October, several Democrats on the Senate Banking Committee wrote demanded that Wells Fargo CEO Tim Sloan and Chairwoman Betsy Duke testify before Congress following recently revealed "rampant consumer abuses."
