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Saving For a Space Ship

A Wells Fargo Computer Glitch May Have Sent Hundreds of Homeowners Into Foreclosure

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 How a Wells Fargo Computer Glitch May Have Sent Hundreds of Homeowners Into Foreclosure



...Homeowners may receive little compensation for their losses

Wells Fargo intends the $8 million it has reserved to serve as full compensation for all 625 victims affected by the glitch. This averages out to just $12,800 per affected homeowner. The bank says it has not yet determined how funds will be divided among the affected borrowers. The 400 homeowners who were ultimately foreclosed on could receive larger payments than those who were able to keep their homes.

Still, given that a foreclosure comes with moving costs, damaged credit, loss of equity, and emotional damage, those payouts may not be nearly enough.


Wells Fargo benefited from mortgage modification as homeowners were being denied

While hundreds of homeowners were denied help under mortgage modification programs thanks to Wells Fargo's glitch, the bank made out pretty well.

By 2010, Wells Fargo was one of the top three mortgage servicers in terms of foreclosure activity, with approximately $17.5 billion worth of foreclosed homes on its books. As the federal government struggled to stem the tide of foreclosures caused by the financial crisis, Wells Fargo was quick to claim its share of recovery funds. The financial institution had received a total of $1.5 billion in HAMP incentive payments from the U.S. government by summer 2015, becoming one of the four largest HAMP servicers along with JPMorgan Chase, Bank of America, and Ocwen.

Just 17.5% of the HAMP incentives Wells Fargo received went to homeowners (which was slightly above the average among participating lenders), with the remainder going to investors and the servicer. Homeowners who benefited were in the minority, as Wells Fargo denied close to 60% of requested HAMP mortgage modifications.  ....


Edited by Saving For a Space Ship

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  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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