Software errors are generally more or less than an inconvenience. However, particularly customers of Wells Fargo recently had to face a severe loss because of software errors in the company. An SEC filing from the bank recently disclosed that a “computation error” in company’s mortgage loan amendment underwriting tool resulted into a denial of loan changes of about 625 customers. Some of the customers did not get loan offers in spite of their eligibility.
Wells Fargo proclaimed that about 400 of those clients ultimately had to lose their homes to foreclosure. In a statement to CNN Money, the bank emphasized that the error did not essentially initiate foreclosures; however, it undoubtedly did not helped the company.
The problem existed between April 13, 2010, and October 20, 2015, when the issue was fixed. Wells Fargo has expressed regret for its mistake. It stated that it will be offering a compensation for the same and has reserved a fund of about $8 Million for customers affected by this error.
However, this is not for the first time that Wells Fargo had to face such an issue. Lately, the company was penalized with a fine for the problem of mortgage loans with wrong income data. However, a computing mistake on this level is very uncommon for the industry as a whole. Whilst bank errors have definitely influenced the lives of people in the past, it is rare for them to face such life-changing effects.
On a similar note, the U.S. Attorney’s Office for the Northern District of California recently proclaimed that Wells Fargo will have to pay about $2.09 Billion as a penalty for supposed misrepresentation of loan qualities. Bank will have to pay the civil penalty after supposedly creating and selling tens of thousands of housing mortgage loans.