Wells Fargo has apologized for the error and stated that it’s “providing remediation”. The bank had set aside $8 million to compensate the customers who were affected. According to the Treasury Department rules, Americans who were struggling to make mortgage payments were allowed to apply for a loan modification. Approximately 625 applicants who should have qualified had their application were denied by Wells Fargo due to the computer glitch. Even more, some 400 customers among the 625 had their homes foreclosed. This happened between April 2010 and October 2015, when the issue was rectified but all was publicly revealed last Friday.
While bank errors have certainly impacted people in the past, it’s uncommon for them to have such life-changing effects.In the last months the bank was also subject of investigation by the federal Securities and Exchange Commission, accused of “improperly encouraging” brokerage clients to sell high-fee debt products that were instead intended to be held for maturity. The practice was among the contributing factors to the 2008 financial crash. Last week, Wells Fargo reached an agreement with the U.S. Justice Department to pay a $2.1 billion fine for issuing mortgage loans.