SAN FRANCISCO–Hundreds of people had their homes foreclosed on after software used by Wells Fargo incorrectly denied them mortgage modifications.
Wells Fargo acknowledged the foreclosures took place in a filing in which it said it has also set aside $8 million to compensate customers affected by the glitch.
According to Wells Fargo, Wells Fargo said the computer error had affected "certain accounts" undergoing foreclosures between April 2010 and October 2015. The bank said it later corrected the problem.
In all, approximately 625 customers were incorrectly denied a loan modification or were not offered one even though they were qualified, according to Wells Fargo’s filing. Of those 625, customers, about 400 were ultimately foreclosed upon.
Wells Fargo said in a statement in a statement to Reuters it was "very sorry that this error occurred" and said it was "providing remediation" to affected customers.
A spokesperson added in a statement to Reuters, "There's not a clear, direct cause and effect relationship between the modification" denials and foreclosures, but confirmed customers who were denied modifications lost their homes.
Separately, Wells Fargo also disclosed it is facing "formal or informal inquiries or investigations" from unnamed government agencies over how the company purchased federal low-income housing tax credits. The document states the probes are linked to "the financing of low income housing developments," but does not offer further details, Reuters reported.
As CUToday.info has extensively reported, the new issues at Wells Fargo are just the latest in a long line of illegal activities for which the bank has been fined on numerous occasions. It is currently operating under a growth cap put in place by the Fed until it corrects numerous deficiencies.