Wells Fargo has set aside $8 million to compensate borrowers who were subjected to erroneous mortgage servicing due to what the San Francisco-based lender insisted was a software error.
Wells Fargo quietly acknowledged in a regulatory filing that 625 customers were either denied a loan modification offer or never received one even though they were qualified, while 400 customers were ultimately foreclosed upon. Wells Fargo did not publicly bring attention to this matter, which was reported on yesterday by CNN
When pressed to explain what went wrong, a Wells Fargo spokesperson said the company was "very sorry that this error occurred" and said it was "providing remediation" to impacted customers. The spokesperson added that while "there's not a clear, direct cause and effect relationship between the modification" denials and foreclosures, those who lost their homes were denied modifications.