Wells Fargo Facing Lawsuit Over Loan Modification Error
Last Updated on May 9, 2019
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At A Glance
- This Alert Affects:
- Wells Fargo customers who were denied mortgage loan modifications as a result of a calculation error. These individuals may have received a letter and check from Wells Fargo regarding the mistake.
- What’s Going On?
- A lawsuit has been filed against Wells Fargo claiming that the bank isn’t doing enough to compensate people who lost their homes after being wrongfully denied loan modifications under the Home Affordable Modification Program (HAMP).
- How Can a Lawsuit Help?
- The lawsuit hopes to recover compensation for all hardships borrowers endured after losing their homes, including both financial and emotional damages.
Attorneys working with ClassAction.org would like to speak to anyone who was denied a mortgage loan modification by Wells Fargo due to a calculation error in the bank’s software tool.
It has been reported that Wells Fargo wrongfully denied hundreds of individuals who qualified for loan modifications under the federal Home Affordable Modification Program (HAMP), causing many to lose their homes as a result.
Wells Fargo’s Loan Modification Scandal: What Happened?
In August 2018, Wells Fargo admitted that a “software error” caused it to deny hundreds of borrowers who actually qualified for and were entitled to a loan modification under HAMP.
Wells Fargo allegedly used its own software to calculate a borrower’s eligibility for HAMP rather than use the tool developed by Fannie Mae for this exact purpose. It’s this software, Wells Fargo admitted, that caused systematic miscalculations that wrongfully denied loan modifications to nearly 900 people. It’s been reported that 545 of these borrowers had their homes foreclosed on as a result.
Reports indicate that Wells Fargo realized the error as far back as 2015 but chose not to disclose this information for three years.
What Does the Lawsuit Have to Say About All This?
According to the lawsuit, Wells Fargo reportedly sent out checks to borrowers who were wrongfully denied loan modifications along with letters that stated:
“When you were considered for a loan modification, you weren’t approved, and now we realize that you should have been. We based our decision on a faulty calculation, and we’re sorry. If it had been correct, you would have been approved for a trial modification.”
The checks ranged from between $1,400 and $25,000 and were intended to “make up for” the customer’s financial loss. The suit claims, however, that these amounts do not provide enough for the harm these people suffered as many lost not only money and equity from foreclosure, but also suffered damage to their credit along with other serious consequences.
The lawsuit hopes to recover “full and fair compensation” for borrowers’ financial, physical and emotional hardships.
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