The Wells Fargo coding error resulted in hundreds of customers losing their homes.
Wells Fargo has admitted the error in an SEC filing. According to Wells Fargo its software incorrectly denied approximately 625 homeowners mortgage modifications to their loan terms.
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The Wells Fargo coding error hit struggling customers over a five-year period between 13 April 2010 and 20 October 2015.
“This error in the modification tool caused an automated miscalculation of attorneys’ fees that were included for purposes of determining whether a customer qualified for a mortgage loan modification,” the bank said.
“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.”
Out of 625 affected customers, nearly 400 customers subsequently lost their homes after the loan modification was incorrectly denied due the underwriting software error.
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By GlobalDataThe bank added that it has allocated nearly $8m to compensate customers who subsequently lost their homes as the bank foreclosed on the loans.
