Between 2010 and 2018, Wells Fargo foreclosed on 545 homeowners. Not a very surprising fact considering that last year alone there were over 675 thousand foreclosures in the United States. The reason that the previously mentioned number of 545 foreclosed homes is so significant is because those homes were foreclosed upon in error.
Wells Fargo has acknowledged that a calculation error led to a number of homeowners being denied a loan modification when they would have otherwise been approved, leading to the unnecessary foreclosure of 545 homes.
Foreclosures in the U.S.
Foreclosures in the U.S. skyrocketed from 2005 to their peak in 2010, when just under 2.9 million foreclosures were filed. Since 2010, the rate of foreclosures has slowly decreased each year, with 2017 having the lowest amount of foreclosure proceedings since they began to rise in 2005.
Alabama alone had almost eight thousand foreclosures in 2017.
Although the national trend shows foreclosures are on the downfall, there a few states that have increased the number of foreclosures since 2010, namely West Virginia and Vermont, which were up 32 percent and 27 percent, respectively.
Wells Fargo Error
Wells Fargo discovered their calculation error, which turned out to be a glitch in their mortgage modification tool, almost three years ago. The glitch erroneously calculated the attorney fees involved in determining whether a borrower would qualify for federally back programs.
The miscalculation led to almost 900 customers being denied their expected loan modification. While it is unclear just exactly how much Wells Fargo miscalculated the attorney fees, the bank’s investigation is still ongoing. This means that there could still be more homes that may be affected.
Wells Fargo has set aside approximately $8 million that will be used to compensate those that were affected by the mistake. When split between those foreclosures we know about at this time, the amount leaves only about $20,000 per customer. The $20,000 would likely not even cover the increase in property value of those that were foreclosed upon, let alone the stress and hardship associated with losing one’s home.
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If you are having difficulty keeping up with your mortgage payments, or have fallen behind due to the inability to pay all of your debts, please contact the Bond & Botes offices for a free consultation.