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Wells Fargo Says Hundreds of Customers Lost Homes After Computer Glitch (cnn.com) 168

Posted by msmash from the software-glitches dept.
Hundreds of people had their homes foreclosed on after software used by Wells Fargo incorrectly denied them mortgage modifications. From a report: The embattled bank revealed the issue in a regulatory filing this week and said it has set aside $8 million to compensate customers affected by the glitch. [...] Wells Fargo said the computer error affected "certain accounts" that were undergoing the foreclosure process between April 2010 and October 2015, when the issue was corrected. About 625 customers were incorrectly denied a loan modification or were not offered one even though they were qualified, according to the filing. In about 400 cases, the customers were ultimately foreclosed upon.
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Wells Fargo Says Hundreds of Customers Lost Homes After Computer Glitch More

Wells Fargo Says Hundreds of Customers Lost Homes After Computer Glitch

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  • Can Wells Fargo do anything _right_? (Score:5, Insightful)

    by technosaurus ( 1704630 ) on Sunday August 05, 2018 @04:35PM (#57074482)
    They say there is no such thing as bad publicity, but damn. We never should have bailed them out.

    • Re: (Score:1)

      by ebvwfbw ( 864834 )

      The more I read about them and from very good sources, the more I'm amazed that they aren't in a 6X12' cell some place for a long time because that's where they belong. While this one may be an honest mistake, they have some seriously bad karma going on.

  • bug?? or did some people fix it to make there numbers look better?

  • So odd that the "glitch" always favors the bank (Score:5, Insightful)

    by jeff4747 ( 256583 ) on Sunday August 05, 2018 @04:37PM (#57074492)

    Almost like it's intentional.....

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Wasn't with Wells Fargo, but did try to use the modification program. We did everything right, stayed current on payments. Qualified financially. The bank threw every road block they could at us. "Lost" paperwork multiple times. Denied receiving paperwork, then tried to deny receiving the second attempt. I actually recorded the conversation with the rep confirming it. That piece was magically found, but they continued to stall. Registered mail would some how takes weeks to be acknowledged. In the end, we d

      • Fuck banks. $3 overdraft turned into $300 within 4 days with recurring DAILY fees. I told them they would never see a penny from me. they sent to collections, collections called. i explained what happened with the bank and that i still had all the documents. I told them to clear the debt and it better not show up on my credit or i would sue. they closed the account and apologized. I was 19. I will NEVER deposit a penny into a bank as long as i have control of my money. I hear tell credit unions are the way

        • That happened to me with Wells Fargo. Part of it was my insurance company kept resubmitting the payment. I was about 30 cents short, got hit with the overdraft fee and had the payment denied. Within a week I was at -200.

          I had a job a few weeks later, brought my paycheck to WellsFargo. They insisted on putting a two week freeze on it. I took my paycheck back and went to Security Service Federal Credit Union and never had a problem like that again.

          WellsFargo had bought the bank I had been with and was th

          • Mine happened through a debit card purchase on a Wells Fargo account that wasn't supposed to even be able to overdraw. I feel their execs should be shot in public, but in the knees and left to bleed out in the street.

        • Yep. Check out your local credit union.

          When I was in college, I had an account with one. Student fees were auto-debited from my account, and the college business office accidentally chose my savings account rather than checking account. Then proceeded to hammer it every hour for the money for two days before the credit union called me and was like, "Um, you need to tell them to stop." Note that the college didn't bother to let me know.

          I straightened it out with the college, went to the credit union, and eac

  • 8 million? (Score:5, Insightful)

    by AmiMoJo ( 196126 ) on Sunday August 05, 2018 @04:39PM (#57074508) Homepage Journal

    "hundreds" of affected home owners, assume minimum 200. That's just $40k each.

    • That amount is loose change found in Wells Fargo's sofa.

  • $8 mil / 400 people = $20,000 per forclosure (Score:5, Insightful)

    by Anonymous Coward on Sunday August 05, 2018 @04:42PM (#57074520)

    Not enough. Add a zero. The emotional toll of foreclosure on a family is much worse than the financial toll.

    • Not enough. Add a zero.
      That depends on the situation:

      Was this a bank policy, based on a business decision such as "we're ahead for our stockholders by taking less interest and avoiding foreclosure on these loans", "keeping our loan customers in their houses is good for business or other company goals (even "being nice") or the like? Was this error in implementation inadvertent and non-discirminatory on "suspect categories" like race, religion, national origin, or neighborhood WITHIN THE SET OF PEOPLE TO WH

    • Comment removed based on user account deletion

    • Re: (Score:1)

      by ebvwfbw ( 864834 )

      Now don't be silly. The 8 million for the 400 people is the after lawyer fees. The original settlement was 8 billion.

  • Wells Fargo is full of shit (Score:5, Interesting)

    by Anonymous Coward on Sunday August 05, 2018 @04:47PM (#57074550)

    Wells Fargo is full of shit. It was assuredly not a "computer glitch" which made those people lose their homes; it was the fact that Wells Fargo didn't want to deal with people who hit economic hard times and could not pay their mortgages every month. It's well known that, during the foreclosure crisis of the early 2010s, banks made it as difficult as they could for people to change the terms of their mortgages, because the banks could make more money foreclosing and selling the houses.

    • Comment removed based on user account deletion

      • Re: Wells Fargo is full of shit (Score:5, Interesting)

        by whoever57 ( 658626 ) on Sunday August 05, 2018 @05:52PM (#57074866) Journal

        It's shocking.

        There were stories at the time of people who contested a foreclosure, pointing out that the bank didn't have the right to foreclose, but judges could not believe that the banks would engage in such corrupt acts, so ruled in favour of the banks.

        I wonder if those judges have ever had second thoughts about their decisions, which resulted in taking away people's houses, based on possibly fraudulent statements by banks?

        • Re: Wells Fargo is full of shit (Score:5, Insightful)

          by Zontar_Thing_From_Ve ( 949321 ) on Sunday August 05, 2018 @08:38PM (#57075404)

          I wonder if those judges have ever had second thoughts about their decisions, which resulted in taking away people's houses, based on possibly fraudulent statements by banks?

          I'm not an attorney, but I have quite a few good friends who are attorneys. I can answer that for you. For most if not all - nope. They don't care if their decision screwed people over. One of the really bad things about attorneys in the USA is that there is a belief that goes with the job that the system is always right, even when the outcomes are wrong. Some crazy guy sues you unjustly and you have to wipe out your money to defend yourself from it? Lawyers would tell you that the system works. They don't care if it's abused as long as they get paid. And the number one dirty secret of the legal profession is that lawyers always get paid no matter what. In fact, cops will go out of their way to do all kinds of things to help lawyers get paid. If you owe a lawyer money and it goes unpaid long enough, cops are happy to show up at your door and start taking your stuff to sell to get money or to start seizing your paychecks. If someone owes you a big amount of money and won't pay it, good luck trying to get someone (judge, police) to care enough to do anything about it. Maybe they will, maybe they won't. But they always make sure that lawyers get paid. I have a friend whose wife went a little crazy and she divorced him. She quit her job to make sure she had no income coming in and hired one of her city's highest priced bulldog female divorce lawyers to represent her. Didn't pay a dime to the lawyer but ran up over $30,000 in legal fees. Her lawyer sued the husband for the entire cost and a sympathetic judge made him pay it. This is why I say that lawyers always get paid. Think about it - a lawyer took a case knowing her client wouldn't pay her because she also knew the system would let her collect from the estranged husband. So no, I can assure you that the vast majority of the judges, if not every single one of them, don't care at all.

  • One-way street (Score:5, Insightful)

    by PopeRatzo ( 965947 ) on Sunday August 05, 2018 @04:47PM (#57074552) Journal

    It's funny how these large-scale "computer glitches" seem to favor the bank and not the consumer.

    They lost homes, and now Wells Fargo is required to pay them each $20,000. If Wells Fargo accidentally put money into my account, do you think they'd settle for me returning dimes on the dollar?

    • Comment removed based on user account deletion

    • It's funny how these large-scale "computer glitches" seem to favor the bank and not the consumer.

      Banking is a carefully balanced equation and any unbalance will always seem to favour the banks in some way. Only recently I read stories of glitches that had the opposite effect of the one described here, approved refinancing and mortgages rather than preventing them.

      Guess who lost their houses: The people who then couldn't pay for the newly financed loans.

    • Re: (Score:2)

      by guruevi ( 827432 )

      In this case, it did affect the bank a lot more than the consumer. If you default on your home, you do not keep paying it off. The bank then owns it and has to sell it off for a pittance, often the previous owners will destroy the home as they go out as well and in many cases the houses sit there forever and the bank has to pay the taxes, utilities (in some climates you have to heat the home for it not to freeze), a security company (otherwise looters rip out all the copper) etc on it.

      I purchased a house in

      • The bank then owns it and has to sell it off for a pittance

        Now you're getting to the crux of the financial crisis. See, it wasn't the banks that had to "sell it off for a pittance", it was the secondary mortgage holder, who had bought the mortgage bundled with other mortgages, then insured that bundle via credit default swaps. The banks lost nothing when the house was "sold for a pittance". And since the house's price had been inflated in a bubble caused by this mortgage "pump and dump" scheme, don't you

  • Sorry you lost your home... (Score:1)

    by Anonymous Coward

    Here is $20,000 opps my bad.... less if all 625 customers get a cut...doesn’t seem enough to compensate for all the hassles of loosing a house

  • Seems better than the average level of customer service people should expect from this fine banking institution. At least those people didn't find themselves with new bank accounts and new mortgage applications opened on their names without consent. What's the complaint again?

  • Hard to say this was the sole cause (Score:1)

    by Anonymous Coward

    I think its difficult to say this glitch was the only reason many lost their homes. Many people were so underwater that nobody could really help them. CNN is typically trying to write in facts where they do not exist. The statics were many re writes failed and people lost their homes anyway. Not defending Well Fargo, but clearly CNN is making a sketchy case and assuming a lot.

    • The other major reason is that someone from Wells Fargo bullshitted them in the first place, and not being finance professionals, they believed that the bank actually wanted to give them a loan for a mortgage.

      • The major reason is that walking away was the SMART move when your upside down by 50%.

    • Re: (Score:1)

      by Anonymous Coward

      Well, only about 625 customers were affected. If CNN was making this worse than it was, i'd think that they talk about thousands, if not tens of thousands of people. But maybe you are right. Who knows? Probably not many people know and the gen pop will never know, because that'sjust how it goes.

  • Oh, for Pete's sakee. (Score:5, Insightful)

    by hey! ( 33014 ) on Sunday August 05, 2018 @07:40PM (#57075216) Homepage Journal

    I don't doubt that there was a "computer glitch", but doing what a (do I have to say this?) potentially buggy piece of software tells you to do without question was a business decision.'

    Sure, some programmer made a mistake, because programmers like all humans are fallible. But bank management had a totally wrong-headed approach to doing their jobs.

  • No Justice (Score:3)

    by nehumanuscrede ( 624750 ) on Sunday August 05, 2018 @09:23PM (#57075524)

    Anytime a company gets caught doing something unethical, they always seem to have their scapegoat ready to go.
    This scapegoat is more powerful than an entire ARMY of lawyers can ever hope to be.
    It's effectively their " Get out of Jail " free card.

    Ever notice how:
    It's always a " glitch ", " computer error ", " junior programmer " or " hackers ".
    It's never, EVER the fault of the company. It's always something else.

    No one goes to jail. The penalty is basically a slap on the wrist, the upper level executives are allowed to leave with
    their golden parachutes and the whole thing quietly fades away to a memory mostly forgotten a few years later.

    It's a sad, sad state of affairs really.

    • Yep. They committed fraud. So much fraud that they automated the fraud with the computer. But bless their little cotton socks, it seems no actual person was involved in the crime! It was the computer that's guilty dontcha know.
  • This is by far not the first time Wells Fargo has used software to harm their customers. They do it constantly. Their software developers should be in prison for conspiracy along with management who called for certain software features and configuration. None of these things happen at this scale without intentionally malicious software. There just aren't enough crooked managers across the business units to pull it off.

    2012 - Racism - charging various shades of brown people higher interest automagically
    h

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