Wells Fargo Blames Computer Glitch as Reason It Foreclosed on Hundreds of Homes

cageymaru

cageymaru

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Wells Fargo is in hot water again with the government and this time it blames faulty software code for foreclosing on hundreds of homes. 625 accounts that should have been allowed mortgage modifications were denied and in 400 cases customers were foreclosed upon. This fine may seem hefty at $8 million, but pales in comparison to the $2.1 billion fine Wells Fargo agreed to pay for issuing mortgage loans it knew contained incorrect income information.

Wells Fargo said the computer error affected "certain accounts" that were undergoing the foreclosure process between April 2010 and October 2015, when the issue was corrected. About 625 customers were incorrectly denied a loan modification or were not offered one even though they were qualified, according to the filing. In about 400 cases, the customers were foreclosed upon.
 
They owned up to it in their regulatory filling, are setting aside money for the homeowners affected, etc. Good job for them. It sucks for those 400 homeowners, but 400 out of millions of refinanced? Come on, thats gotta be within the margin of error for software code.
 
I don't have much sympathy for people in foreclosure. Many of them used their houses like ATM machines when the market was hot, blew the money they took out, and then got caught short when the markets cooled down.

And some of them might not even have wanted to renegotiate terms: there's a brutally correct economic argument (taught to me in law school) that once your house is sufficiently underwater, it's better to let the bank foreclose, walk away, and focus on rebuilding your credit rating. Do it right, and in a few years (far faster than you could get "above water" paying off the mortgage) it will be like the foreclosure never even happened, and your credit rating may be even better than it was.
 
Actually, the CEO who was in charge during all of this was "forced into retirement", and the new guy is working hard to right the ship. Folks in glass houses...
Death from medical malpractice has a higher likely hood of happening to you, than being one of the 400 folks affected.
The system didnt auto foreclose upon any of them - they just were not allowed to renegotiate the shitty situation they got themselves in by buying too much house to begin with. There is a certain amount of being responsible for this that needs to fall on those people too.
 
Jarod888 said:
Actually, the CEO who was in charge during all of this was "forced into retirement", and the new guy is working hard to right the ship. Folks in glass houses...
Death from medical malpractice has a higher likely hood of happening to you, than being one of the 400 folks affected.
The system didnt auto foreclose upon any of them - they just were not allowed to renegotiate the shitty situation they got themselves in by buying too much house to begin with. There is a certain amount of being responsible for this that needs to fall on those people too.
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Sloan was the COO, 2nd in command up until 2016. Before that he was CFO. He's got just as much culpability as Stumpf, if not more.
 
Jarod888 said:
Actually, the CEO who was in charge during all of this was "forced into retirement", and the new guy is working hard to right the ship. Folks in glass houses...
Death from medical malpractice has a higher likely hood of happening to you, than being one of the 400 folks affected.
The system didnt auto foreclose upon any of them - they just were not allowed to renegotiate the shitty situation they got themselves in by buying too much house to begin with. There is a certain amount of being responsible for this that needs to fall on those people too.
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yup, I feel bad for them but there is a reason I bought the house I did. Had all the space and thigns I needed but was built in the late 70's, compared to houses of similar build style and size that were all new(ish) but were $150k more I was happy with my choice. I'd rather live in an older but still beautiful house than be house broke so I can tell everyone about my fancy NEW house lol.

Real kicker is house prices have fallen alot on the newer houses with some of them selling for 80-100k less, mine has dropped 10k lol.
 
HeadRusch said:
The article makes it read like a cold, calculating bank computer put 400 families out on the street overnight.........reality is quite a bit different.
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Sure they failed to pay on time so a good share of the blame lies squarely on the customers shoulders for getting into that situation. HOWEVER, laws do exist to say how the foreclosure processes are supposed to work (to protect you) and WF fucked up and didnt follow the law.

WF, and most other banks, are just shitholes that we have little choice but to use. It used to be banks cared about their customers and paid reasonable interest rates. Now they keep all that money and provide basically nothing more than a place to hold my money.
 
What a lot of your are overlooking (by judging people you know NOTHING about) is that these 400 people were eligible by LAW to have their home refinanced. The error in the code said they were "NOT" eligible, which forced the bank to say "Sorry we can do nothing to help you" so they were foreclosed on. Now, were some of these people in debt they should not have been? Sure, most likely that is true. That does not change the fact that the bank's software deprived them of the help they were entitled too.

The bank did not set aside money for the settlements/lawsuits that are coming out of the goodness of their hearts.

*Disclaimer: No I am not one of these 400, nor do I know anyone that was. Just do not judge people without knowing the facts.
 
Congrats on Wells Fargo Faulty Software Code on becoming the new U.S. Housing and Urban Development Secretary, replacing the previous secretary: a pile of flaming poop.
 
Ugh. The far right guys that comment negatively on all these articles about people that were preyed upon. I'm in the industry, and the practices were awful and promoted through deregulation and we are heading that way once more (please... I'll rip apart Bill Clinton - he accelerated some of the worst policies of all and y'all I'm referring to know my stances).

Love the hypocrisy though.
 
ccityinstaller said:
What a lot of your are overlooking (by judging people you know NOTHING about) is that these 400 people were eligible by LAW to have their home refinanced.
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That doesn't mean those people wanted to re-fi, or (as I explained previously) that it was in their best interests to do so.
 
kju1 said:
WF, and most other banks, are just shitholes that we have little choice but to use. It used to be banks cared about their customers and paid reasonable interest rates. Now they keep all that money and provide basically nothing more than a place to hold my money.
Click to expand...

Credit Unions and local small banks are the way to go. Good service and get to know the tellers and they’ll help you out. Though I will admit I’ve taken loans from the bigger banks, better interest rates sometimes.

Otherwise, they don’t hold my money.
 
These guys are seriously making a play for worst company. I mean we can't go 2 weeks without them saying "oh btw, you know that shady stuff we did before? We we also did ...".
 
Bullshit.

They robo-forclosed people without warning and then refused any communication with them. (My room mate lost his home during this time because of this.) This was not a "bug." It's a piss poor excuse because Wells Fargo employed scam artist fudged people's income to suite their needs and then to cover it up decided to massively foreclose people whom' they fucked with.

Wells Fargo is a scam institution not paying any consequences. Fuck them and their "8 Million" reparation fund. They need to pay 8 million per person. Fuck them.
 
Nolan7689 said:
Credit Unions and local small banks are the way to go. Good service and get to know the tellers and they’ll help you out. Though I will admit I’ve taken loans from the bigger banks, better interest rates sometimes.

Otherwise, they don’t hold my money.
Click to expand...

They used to be better but they arent far behind the majors now. About the only one I have thats still "ok" is USAA and they dont pay shit on savings.
 
martinmsj said:
Bullshit.

They robo-forclosed people without warning and then refused any communication with them. (My room mate lost his home during this time because of this.) This was not a "bug." It's a piss poor excuse because Wells Fargo employed scam artist fudged people's income to suite their needs and then to cover it up decided to massively foreclose people whom' they fucked with.

Wells Fargo is a scam institution not paying any consequences. Fuck them and their "8 Million" reparation fund. They need to pay 8 million per person. Fuck them.
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When I heard "Computer Glitch" I rolled my eyes. What kind of computer Glitch can make employee's blindly force people out of their homes?

2fe6o2.jpg
 
How much of that is going back to those that were foreclosed on exactly? Is damage to their credit rating and earning power going to be compensated for?

I suspect the answer to all is no.
 
kju1 said:
Sure they failed to pay on time so a good share of the blame lies squarely on the customers shoulders for getting into that situation. HOWEVER, laws do exist to say how the foreclosure processes are supposed to work (to protect you) and WF fucked up and didnt follow the law.

WF, and most other banks, are just shitholes that we have little choice but to use. It used to be banks cared about their customers and paid reasonable interest rates. Now they keep all that money and provide basically nothing more than a place to hold my money.
Click to expand...

Never said they didn't screw up and shouldn't be held accountable...
 
ccityinstaller said:
What a lot of your are overlooking (by judging people you know NOTHING about) is that these 400 people were eligible by LAW to have their home refinanced. The error in the code said they were "NOT" eligible, which forced the bank to say "Sorry we can do nothing to help you" so they were foreclosed on. Now, were some of these people in debt they should not have been? Sure, most likely that is true. That does not change the fact that the bank's software deprived them of the help they were entitled too.
Click to expand...

True, but the reality is that most of those people would not have been able to complete the refinancing they where "eligible" for, or would have ended up in foreclosure again in a couple years. End result for most would have been the same.
 
Ragenrok said:
yup, I feel bad for them but there is a reason I bought the house I did. Had all the space and thigns I needed but was built in the late 70's, compared to houses of similar build style and size that were all new(ish) but were $150k more I was happy with my choice. I'd rather live in an older but still beautiful house than be house broke so I can tell everyone about my fancy NEW house lol.

Real kicker is house prices have fallen alot on the newer houses with some of them selling for 80-100k less, mine has dropped 10k lol.
Click to expand...

Same here.
I bought a home I could afford, with 20% down to avoid the added cost of mortgage insurance.
It was a fixer, and I spend the next few years putting in thousands of hours in sweat equity to make it a nice home.

Meanwhile I saw people who bought more expensive homes, missing payments and then whining when they where foreclosed on.
So the politicians push through laws to help these people, letting them finance at lower rates and even forgiving some of their loans.

A friend of mine had a neighbor who managed to keep his home and live in it rent/payment free for over 2 years by playing the foreclosure/bankruptcy game with the bank.

Typical reward the bad behavior, so we get more of it, while punishing the responsible people by excluding them from any of these programs.
 
I'm a social liberal / economic conservative. If a conservative ideal is to remake the country the way it was in the 1950's, I'll agree - I think home loans should have a simple set of laws that say that a person / family's income, minus their debt, qualifies them for a home loan of XX% of their income, AND THAT'S IT.

No more screwy balloon payments or inflation adjustments or other stupid predatory crap that got us in this mess. The formula for qualifying for a loan should comfortably fit on a fortune from a fortune cookie. The only thing on a home loan document should be the formula for qualification, including your income, the amount of the loan, the percent interest agreed to, the title ID of the house, and the payment plan. No other small print, any other agreements or gifts are void and illegal. All agreements on payments, refinancing, insurance and foreclosure are handled by municipal law and cannot be waived or voided.

I'm in favor of less regulation for banking and stock trading, provided that there are clear rules about what is legal and what is not. BUT, when something illegal happens, everyone who broke the law must face legal consequences. All those telemarketers from Wells Fargo who sold unwanted insurance, created unwanted accounts, and levied unwanted fees? They should all face criminal prosecution and be barred from working in the financial industry. And I'm talking about the little guys, not their bosses - their bosses may have told them to do it, but that doesn't matter, the little guys are the machine that broke the law. They can testify against their bosses, and if they do I'd demand that their bosses got prison time, but until everyone realizes that the crimes that your boss asks you to commit can get YOU in hot water, nothing changes. It's like the Army, responsibility happens at the LOWEST level, not the top (although in the Army the top levels will get fucked in their own special way.)

.... Sorry, that soap box jumped right in front of me. Must turn rant off.
 
haste. said:
Ugh. The far right guys that comment negatively on all these articles about people that were preyed upon. I'm in the industry, and the practices were awful and promoted through deregulation and we are heading that way once more (please... I'll rip apart Bill Clinton - he accelerated some of the worst policies of all and y'all I'm referring to know my stances).

Love the hypocrisy though.
Click to expand...
Gramm-Leach-Bliley was named for three "conservative" GOP people — a senator and two members of the house. Every Republican in Congress except Ron Paul voted for it. Every single one, except one.

Bill Clinton signed it and a majority of Democrats voted in favor of it. Senator Byron Dorgan delivered a speech in which he warned of the dire consequences of passing it. Bernie Sanders voted against it.

The bill was a bomb set up so insiders could loot the economy coming (the bubble build-up) and going (the bailouts). Elizabeth Warren wrote an article in 2008 where she said the US economy has a long history of engineered boom and bust cycles, so wealthy insiders can loot everyone.

The GOP platform has recently endorsed Gramm-Leach-Blilely 2.0. Rinse, repeat. Aside from a few, this history shows us that our "two" party system is really one party, when it comes to the truly important thing: money-making for the wealthy. The battling is mainly about which group of rich people will benefit the most from the corrupt schemes.
seanreisk said:
I'm a social liberal / economic conservative. If a conservative ideal is to remake the country the way it was in the 1950's, I'll agree
Click to expand...
The 50s was built off of WWII war profits (including the European brain drain), a smaller population, and more resources to exploit. There is no way you're ever going to see the single-earner nuclear family bring in that kind of standard of living again, with today's globalized markets. China is eating our lunch and insiders aren't going to change that because it benefits them. And, to top it off, the CEO class wasn't enriching itself at nearly the rate it is now in the 50s. The economic model was not nearly as plutocratic then as it is now. So-called conservative politicians have zero interest in reestablishing a more meritocratic model.
 
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SIS said:
. . . . .

The 50s was built off of WWII war profits. There is no way you're ever going to see the single-earner nuclear family bring in that kind of standard of living again, with today's globalized markets. China is eating our lunch and insiders aren't going to change that because it benefits them. And, to top it off, the CEO class wasn't enriching itself at nearly the rate it is now in the 50s. The economic model was not nearly as plutocratic then as it is now. So-called conservative politicians have zero interest in reestablishing a more meritocratic model.
Click to expand...

People look at the 50s and go "Oh look how good everyone had it" and forget the average house was a 1 car 1300sq/ft home with 2 or 3 smallish bedrooms and 1 or maybe 1.5 baths. One car was the norm. The kids walked to school or if too far, rode the bus or a bike. If you had a TV it was most likely about 19" or smaller and B&W. And you had 1 phone if you had a phone. And every house had clothes lines for a reason.

WWII had left the US with a LOT of excess factory capacity that was converted to make consumer stuff. These factories started aging out in the 60s, about when Japan was finishing recovering from the war and becoming competitive on the world market. Add in the cost of the new environmental regulations and it became cheaper to close our old factories and buy stuff from Japan. Repeat a couple decades later substituting China for Japan.

Ironically, China's waking up to the environmental mess they are in may make it competitive to move some production back to the US.

As for WF, 625 mishandled accounts out of millions is probably a far better success rate then the government can show.
 
plenty of people bought homes they could afford, were talked out of fixed rates into variables by slick sales folks lying their ass off to naive first-time home buyers only to raise their rate a half point ever six months on the dot until their greed literally priced their customers out of the home. mine went up 12 points until i was FINALLY late on a payment after 5 years of perfection despite the near in double mortgage payment, then denied a refinance until my wife finally got our state Representative involved. i won't even tell you all the lies given to our face...

but yeah keep believing it's all the buyers fault. i paid 2 years of double mortgage rates btw. still here too despite their efforts and bought it in 2003.

then we have the audacity to bail them out of a problem their own greed created.

there is way more to the story too and something even more heinous than the above but I'm too tired to talk about it anymore as it kills me. just can't believe how many people blame homebuyers just bc they told you so. there is no greater evil on the planet than these lenders and if they can screw you they will... just be glad if you haven't been yet.
 
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time and time again this bank is full of fail. My money would go into my mattress before any WFaccount.
 
shpankey said:
plenty of people bought homes they could afford, were talked out of fixed rates into variables by slick sales folks lying their ass off to naive first-time home buyers only to raise their rate a half point ever six months on the dot until their greed literally priced their customers out of the home. mine went up 12 points until i was FINALLY late on a payment after 5 years of perfection despite the near in double mortgage payment, then denied a refinance until my wife finally got our state Representative involved. i won't even tell you all the lies given to our face...

but yeah keep believing it's all the buyers fault. i paid 2 years of double mortgage rates btw. still here too despite their efforts and bought it in 2003.

then we have the audacity to bail them out of a problem their own greed created.

there is way more to the story too and something even more heinous than the above but I'm too tired to talk about it anymore as it kills me. just can't believe how many people blame homebuyers just bc they told you so. there is no greater evil on the planet than these lenders and if they can screw you they will... just be glad if you haven't been yet.
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Sorry, but a toddler could have seen a variable rate was a bad idea.
 
Fines are just the cost of doing business. When someone goes to jail, then there will be a deterrent to fraud.
 
SIS said:
The 50s was built off of WWII war profits (including the European brain drain), a smaller population, and more resources to exploit. There is no way you're ever going to see the single-earner nuclear family bring in that kind of standard of living again, with today's globalized markets. China is eating our lunch and insiders aren't going to change that because it benefits them. And, to top it off, the CEO class wasn't enriching itself at nearly the rate it is now in the 50s. The economic model was not nearly as plutocratic then as it is now. So-called conservative politicians have zero interest in reestablishing a more meritocratic model.
Click to expand...

Very few people in the United States realize that our post-World War II glory was from good fortune and not because of our great enlightened American society. A couple of other factors in our post-war dominance is that we were the largest industrialized nation that wasn't bombed completely to dirt, and that we built so many Liberty ships (which we practically gave away after the war) that we had a huge export capacity that made it affordable for independent shippers to move our goods around the world. I just finished reading a book on the economic impact of the Korean war and the post-Korea cold war, and if you can believe it, the Korean war was another great boon for the United States and also, strangely, a great boon for South Korea. Of all the foreign countries that have bases for American troops, South Korea is one of the few that doesn't want to kick the US off of their soil. We have a unique partnership with them.

Sadly, we've raised several generations that think that America is the infallible land of unquestionable greatness, and they have an entitled opinion that the rest of the world should be more respectful of us. These people are unable to look at our situation and see that we are marching towards irrelevance.


shpankey said:
... there is no greater evil on the planet than these lenders and if they can screw you they will... just be glad if you haven't been yet.
Click to expand...

I'll tell you my own story ...

In 1998 or so I decided that I needed another computer, and since I had just made a big down payment on a car I decided to accept Dell's offer of financing. $1500 available for financing, of which I spent something like $1475. Dell sent me the invoice for the computer, I signed into their system, selected the new paperless system, told them to automatically take the minimum payment out for a payoff in 24 months, and that was that. A few weeks later I received my paperwork for the loan which noted the total payment numbers, the dates of payment, the amount that would be credited to the loan and the amount that would be credited to interest, and other fiddly details. Every month they sent me an email telling me the payment number and the amount they took out of my account.

Fast forward about 20 months and I was thinking about paying off the loan and getting one of the fancy Dell flat screen monitors. I called Dell for the payoff amount, and found out ... that I owed over $2000 on the loan. See, someone tacked on an installation fee that I didn't ask for, and did not appear on any of my invoices, which took the total to over $1500. Then, when the first payment was due, they tacked on an 'overdrawn credit limit fee', which meant that I didn't even pay the correct minimum that month. Next month I was hit with the same overdrawn credit limit fee, plus a late fee since I hadn't paid last months minimum. Then my interest rate was moved from 16% to 34%. And so, after two years of making the automatic payments that Dell asked for, I owed $500+ more than the original amount of the loan.

My lawyer had a good time with that one. We won, but I still had to pay the $800 for the lawyer.
 
kju1 said:
They used to be better but they arent far behind the majors now. About the only one I have thats still "ok" is USAA and they dont pay shit on savings.
Click to expand...
No one pays shit for savings. I went to the bank to try and fixs her fucmed accounts a year and couldn't believe the shit intrest rates banks have now. I don't even know why have a savings account anymore. One CD account that had $10k in it only made $8 when it matured. A damn savings account was only .01% less..07% on a CD account is a joke.
 
Wells Fargo played Mr. Potter in the movie It's a Wonderful Life and ...

This is what a computer glitch looks like ...

glitch.jpg
 
SIS said:
Gramm-Leach-Bliley was named for three "conservative" GOP people — a senator and two members of the house. Every Republican in Congress except Ron Paul voted for it. Every single one, except one.

Bill Clinton signed it and a majority of Democrats voted in favor of it. Senator Byron Dorgan delivered a speech in which he warned of the dire consequences of passing it. Bernie Sanders voted against it.

The bill was a bomb set up so insiders could loot the economy coming (the bubble build-up) and going (the bailouts). Elizabeth Warren wrote an article in 2008 where she said the US economy has a long history of engineered boom and bust cycles, so wealthy insiders can loot everyone.

The GOP platform has recently endorsed Gramm-Leach-Blilely 2.0. Rinse, repeat. Aside from a few, this history shows us that our "two" party system is really one party, when it comes to the truly important thing: money-making for the wealthy. The battling is mainly about which group of rich people will benefit the most from the corrupt schemes.

The 50s was built off of WWII war profits (including the European brain drain), a smaller population, and more resources to exploit. There is no way you're ever going to see the single-earner nuclear family bring in that kind of standard of living again, with today's globalized markets. China is eating our lunch and insiders aren't going to change that because it benefits them. And, to top it off, the CEO class wasn't enriching itself at nearly the rate it is now in the 50s. The economic model was not nearly as plutocratic then as it is now. So-called conservative politicians have zero interest in reestablishing a more meritocratic model.
Click to expand...
Ok bud tl:dr but from grazing it I would assume ur agreeing with me. A series GOP bills were fasttracked by bill clinton that created a marketplace to allow extreme predatory practices to be legal. I'm left leaning but the mortgage crisis is largely the result of Clinton era policy (does not matter which side initiated it). But Bush also encouraged the continuation of the practices and deregulated further.

The CFPB in my opinion is a load of shit. But rolling back Clinton and Bush era deregulation is a good thing for consumers and now we all get the pleasure of attempting to head right back into a brand new crisis with the new deregulation... only this time it might fuck investors trickling down to the little guy. Gotta love trickle down!
 
vegeta535 said:
No one pays shit for savings. I went to the bank to try and fixs her fucmed accounts a year and couldn't believe the shit intrest rates banks have now. I don't even know why have a savings account anymore. One CD account that had $10k in it only made $8 when it matured. A damn savings account was only .01% less..07% on a CD account is a joke.
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Guaranteed return is worthless unless you are just parking funds. I've been in the industry long enough to remember 10% 5 years...
 
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