Sen. Elizabeth Warren grills Wells Fargo CEO: ‘You should be fired’
Wells Fargo acknowledged Friday that hundreds of its customers lost their homes over a roughly five-year period because of an error by the bank.
In yet another apology for the San Francisco-based bank, Wells said a calculation error involving a mortgage underwriting tool resulted in 625 customers being incorrectly denied or not offered modifications to make their loans more affordable. In about 400 of those cases, the homes were ultimately foreclosed on.
The bank, which has a large presence in Charlotte, said the error affected customers in the foreclosure process between April 2010 and October 2015, when the problem was corrected.
The error was uncovered in an internal review, Wells said. The bank also said it has set aside $8 million for customers who were caught up in the problem.
“We’re very sorry that this error occurred and are providing remediation to the approximately 625 customers who may have been impacted,” spokesman Tom Goyda said in a statement. He said the bank did not have a breakdown of where the customers were from.
Wells also disclosed Friday that federal agencies are probing how the bank purchased certain federal low-income housing tax credits in connection with the financing of low-income housing developments. The bank did not provide additional details about those investigations.
The latest disclosures add to the stream of revelations about practices that have harmed customers at the fourth-largest U.S. bank, whose reputation has been tarnished by a massive sales scandal that erupted in 2016 as well as newer problems.
On Wednesday, the U.S. Justice Department fined Wells more than $2 billion for mortgages it made and sold to investors in the run-up to the financial crisis. Wells agreed to that deal to settle allegations it knowingly misrepresented the quality of the residential loans, which cost investors billions of dollars when they soured.
In April, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency fined Wells $1 billion over claims of improper mortgage and auto-lending practices that harmed consumers.
According to Friday’s disclosure, made in a securities filing, Wells said it had substantially completed the internal review of the mortgage modification issue.
Wells also noted that it continues to review other parts of its business that it previously disclosed may have harmed customers. Those include foreign exchange, wealth management, auto lending and add-on products like identity theft protection.
Wells has about 25,100 workers in the Charlotte metro area, its largest employment hub.
Did this happen to you?
If you or anyone you know lost a home because of Wells Fargo’s error, reporter Deon Roberts would like to hear from you. Contact him at email@example.com or (704) 358-5248.