CHARLOTTE, N.C. — Wells Fargo says a company mistake contributed to hundreds of foreclosures because it miscalculated customers' eligibility for mortgage modifications.
The bank said in a filing Friday the error caused about 625 customers to be denied, or not offered, loan modifications they otherwise qualified for. Foreclosures were completed in about 400 of the cases.
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The customers had been using federal programs that helped families at risk of losing homes. Spokesman Tom Goyda says there's no breakdown of where the foreclosures occurred.
The error in the bank's underwriting tool lasted from 2010 until it was fixed in late 2015, an internal review found.
With its main corporate office in San Francisco, the bank employs thousands in Charlotte, but it does not appear the Queen City played a central role in this latest mistake.
"It's not necessarily a black eye on Charlotte because it's not a unit that was housed here," Tom Bartholomy, with Charlotte's Better Business Bureau, said.
Wells Fargo has already faced historic fines over the past two years for creating unauthorized accounts and other banking misconduct.
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"How much more of this can this institution take?" asked Bartholomy.
The bank disclosed it faces yet another federal inquiry now and has set aside $8 million to make customers whole.
In a statement on Monday, Wells Fargo spokesperson Josh Dunn said, "We're very sorry that this error occurred and are providing remediation to the approximately 625 customers who may have been impacted."
"Nobody wants to hear sorry," said Bartholomy, "They're teetering back and forth between a "D" and an "F" rating with BBB, and that's not where anybody wants to be let alone a leading bank."
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There's no timeline on this latest foreclosure investigation, however, the bank may choose to reach a financial settlement with those customers before federal authorities wrap up their case.
Last Wednesday, the U.S. Justice Department fined Wells Fargo more than $2 billion.
In April, the Consumer Financial Protection Bureau announced a separate $1 billion fine.
The Federal Reserve has also essentially capped Wells Fargo's ability to grow further until internal reform efforts are confirmed.
(The Associated Press contributed to this report)
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Associated Press
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