Wells Fargo has admitted that a calculation error led to it foreclosing on hundreds of homeowners that were actually eligible for assistance from the bank.
In total, some 545 homeowners who were behind on their mortgages had their homes taken from them after requesting assistance with their late payments.
Moreover, a total of 870 homeowners were wrongly denied help. Of that total, more than half eventually lost their homes.
Wells Fargo discovered the accidental foreclosures following an internal review, it said.
“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 had previously said it was setting aside $8 million, roughly $12,800 per customer. But, the number of affected clients has risen since the bank first reported the error. However, a “substantial majority” of those borrowers have been contacted by the bank and will be offered “remediation”.
“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.
The bank’s admission is just the latest in a series of issues that have plagued it over the last few years. Earlier this year, Wells Fargo said it had paid more than $1 billion in fines to settle dispute over accounts that were opened for individuals who’d never asked for them. It also paid out to settle disputes over the wrongful repossession of cars from a number of its borrowers.