Wells Fargo is in trouble again. The bank has suffered numerous setbacks facing lawsuits in the past couple of years. This week, Wells Fargo was fined $8 million in what the bank calls a ‘computer glitch’ the bank had incurred. Last week the bank agreed to pay a $2.09 billion fine for issuing mortgage loans knowing the loans contained incorrect and erroneous information.
Between April 2010 and October 2015, the bank disclosed a computer glitch had caused approximately 625 customers either to be denied a modification or not offered the customer a modification at all. Wells Fargo ultimately foreclosed on almost 400 of the cases. The bank said they were “very sorry that this error occurred” and that “it was providing remediation” to the customers. The remediation ($8 million) works out to about $20,000 for each of the customers who lost their home to foreclosure by the bank.
Also disclosed in the filing, the bank is facing “formal or informal inquiries or investigations” from federal agencies over how the bank purchased federal low-income housing tax credits. The filing states the inquiries are linked to “the financing of low income housing developments”. No further details are available at this time.
In the $2.09 billion mortgage settlement last week, Wells Fargo did not admit liability on their part. It was announced: ”Today’s agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted.”
The government alleges the bank knew many of its home loans were based on incorrect information regarding income details and misrepresented the quality of the loans between 2005 and 2007. Wells Fargo said it “remained focused on [its] important role as one of the nation’s leading providers of mortgage financing”
In yet another problem for Wells Fargo, the bank has begun refunding customers who were harmed when the bank charged the customers for products that included pet insurance, legal services, home warranties and other forms of insurance. The “add-ons” had been charged to the customer’s accounts without ‘the customer’s full understanding”. The bank is working with regulators to determine the refunds.
The past 15 months have not been kind to the Wells Fargo. Last year a $185 million fine was levied against the bank for opening up to two million fake deposit and credit card accounts, and signing customers for online banking without the customer’s knowledge. In March 2017, Wells Fargo agreed to a $110 million settlement for a class-action lawsuit. In July 2017, the bank agreed to pay another $80 million in damages to hundreds of thousands of customers who were charged for unneeded car insurance. In August 2017, in another review for the same charges, the bank had to pay an additional $2.8 million to pay back harmed customers. In December 2017, the bank was hit again with another lawsuit filed by the Navaho Nation seeking restitution, damages and civil penalties for alleged violations of federal, state and tribal law.
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