A Wells Fargo software glitch has resulted in hundreds of customers being denied loan changes and offers.
Wells Fargo is now facing investigation from undisclosed government agencies after a so-called calculation error on the company’s loan modification underwriting tool was exposed. The Wells Fargo software glitch allegedly denied 625 customers loan changes and offers that they would have been qualified to receive.
Out of the 625 accounts holders, 400 had their homes foreclosed. In a statement to CNN Money, the company said that it was “very sorry that this error occurred.” At the moment, the embattled bank said that it is “providing remediation” to its affected customers.
A spokesperson for Wells Fargo has confirmed to CNN Money that bank customers who were denied loan modifications have indeed lost their homes. However, the spokesperson has also claimed that “there’s not a clear, direct cause and effect relationship between the modification” denials and foreclosures.
The software glitch was first discovered in April 2010 and was only fixed last October 2015. The bank allegedly set aside an $8 million USD remediation fund for its customers who were affected by the issue.
In recent years, Wells Fargo has gone through a series of scandals that caused the company billions of dollars while facing numerous lawsuits and investigations. Just last week, the bank agreed with the Department of Justice to pay a fine amounting to $2.1 billion USD for approving mortgage loans it knew to have wrong income information.
“We are pleased to put behind us these legacy issues regarding claims related to residential mortgage-backed securities activities that occurred more than a decade ago,” Tim Sloan, Wells Fargo CEO, said in a statement.
“Wells Fargo remains focused on our important role as one of the nation’s leading providers of mortgage financing and on our commitment to expanding sustainable homeownership opportunities for our customers.”
Back in 2016, it was also revealed that Wells Fargo had created millions of fake accounts for unsuspecting customers just to boost the company’s sales. Since then, issues surrounding the bank’s shameful practice has ballooned drastically.