An error was disclosed by Wells Fargo when it filed its returns at the Securities and Exchange Commission. It is a costly error that mad many homeless during the 5-year period between 2010 and 2015
The software used to underwrite mortgage has a basic error, by which borrowers have not been provided mortgage modifications. The calculation error
This error has been disclosed by Wells Fargo on Friday when it filed its 10th quarterly results with the Securities and Exchange Commission.
A calculation error has been found in its modification tool by which many of the borrowers of Wells Fargo were affected. Hundreds faced home closures due to this incorrect software that was used. Mortgage modification had been denied to them and customers have been affected.
Investigations are on and mortgage modification mishandling is being scrutinized. A few government agencies are making inquiries into the tax credits provided for low-income housing facility. It is said that the error is related to this housing finance for the low-income, but they have not been confirmed.
Wells Fargo, on admitting the error, says that the foreclosures that affected the people were made within the period of April 2010 to October 2015 due to a software fault.
The bank has revealed that around $8 million has been set aside to provide compensation for customers who had been affected by the mistake. Around 625 customers have been denied loan modification to which they would have been qualified if the mistake had not occurred. Of these, 400 foreclosures have been made already.
Wells Fargo is based in San Francisco and has uncovered this error in an internal review.
Tom Goyda, the spokesman for the bank apologized for the error and the harm caused to the customers. He further adds that the bank will be providing the required remedies to those who have been affected by the software error.