Wells Fargo Allocates $8M to Foreclosure Compensation

Aug 06, 2018

Last year saw a 646 percent increase in foreclosures against seniors with federally-insured reverse mortgages as compared to the previous seven years, according to Department of Housing and Urban Development (HUD) data received by a Freedom of Information

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.

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Phil Hall

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Aug 06, 2018

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