Hundreds of folks had their homes foreclosed on because software program utilized by Wells Fargo incorrectly denied them mortgage modifications.
The embattled bank revealed the difficulty in a regulatory submitting this week and mentioned it has put aside $eight million to compensate customers affected by the glitch.
The identical filing additionally disclosed that Wells Fargo is dealing with “formal or informal inquiries or investigations” from unnamed authorities companies over how the corporate bought federal low-income housing tax credit. The doc states the probes are linked to “the financing of low income housing developments,” however doesn’t supply additional particulars.
Reuters first reported information of investigations and mishandled mortgage modifications on Friday.
Wells Fargo mentioned the computer error affected “certain accounts” that have been present process the foreclosures course of between April 2010 and October 2015, when the difficulty was corrected.
About 625 customers have been incorrectly denied a mortgage modification or weren’t provided one regardless that they have been certified, in response to the submitting. In about 400 instances, the customers have been foreclosed upon.
Wells Fargo didn’t reply to an inquiry from CNNMoney on Saturday.
Wells Fargo has been mired in a collection of scandals in recent times which have value the agency billions and left it dealing with a string of lawsuits and investigations.
Earlier this week, the Justice Department introduced Wells Fargo agreed to pay a $2.1 billion fine for issuing mortgage loans it knew contained incorrect earnings data. The authorities mentioned the loans contributed to the 2008 monetary disaster that crippled the worldwide economic system.
In June, Wells Fargo was accused by the federal Securities and Exchange Commission of using complex financial investments to take advantage of mom-and-pop investors. Wells Fargo, which neither admitted nor denied the SEC’s allegations, mentioned on the time it “cooperated fully” with the SEC probe.
One of its most far-reaching scandals concerned the creation of thousands and thousands of pretend accounts the corporate created for unsuspecting customers in an effort to enhance its gross sales figures. The scope of that challenge ballooned because the follow was first uncovered in September of 2016.