More than 500 Americans lost their homes to California-based megabank Wells Fargo who shouldn’t have, thanks to a computer glitch in their systems.
The revelation was discovered after CBS News looked at a form the bank filed with the Securities and Exchange Commission (SEC) last month, which mentioned that a glitch resulted in the inadvertent denial of 870 loan modification requests. Of those 870 homeowners, more than 500 went into foreclosure due to the bank’s glitch.
CBS News focused on the story of Jose Aguilar, a homeowner in upstate New York who requested a loan modification from the bank when he and his wife discovered mold in the house and incurred unexpected expenses to remediate it. Even though Wells Fargo told him he qualified, he heard nothing after applying for the modification, then found out roughly a year later that his request was denied. After his home went into foreclosure, Aguilar and his wife divorced.
“At that point my son and I had to move to the basement of a friend’s house and we stayed there for three months, and we had nothing. We had a couch and my son had a bed,” Aguilar told CBS. “I felt worthless. I felt like I had let my family down.”
This isn’t the first time that a Wells Fargo computer glitch has resulted in their mortgage customers losing their homes, though. At the end of the second quarter of 2018, an SEC form the bank filed admitted that hundreds of people lost their homes due to their computers incorrectly denying loan modification requests.
“As a result of this error, approximately 625 customers were incorrectly denied a loan modification or were not offered a modification in cases where they would have otherwise qualified,” the bank stated on the June 2018 form. “In approximately 400 of these instances, after the loan modification was denied or the customer was deemed ineligible to be offered a loan modification, a foreclosure was completed.”
Following the June computer glitch, the bank announced it had set aside $8 million to compensate homeowners affected by the glitch. As of this writing, however, Wells Fargo has not yet announced a designated amount to help the latest round of homeowners who have been harmed in their latest error.
Carl Gibson is a politics contributor for Grit Post. His work has previously been published in The Guardian, The Washington Post, The Houston Chronicle, Al-Jazeera America, and NPR, among others. Follow him on Twitter @crgibs or send him an email at carl at gritpost dot com.