Wells Fargo Admits to Error That Cost Borrowers Their Homes
When the economy tanked around 2007-2008, the government knew that something had to be done to help people keep their homes. One option that was created was the Making Home Affordable Program (also known as HAMP, or Home Affordable Modification Program).
The HAMP Program
The program was designed to modify home loans to a level that people could get back on track with defaulted loans, and to lower mortgage payments to an affordable level. With these modifications, foreclosures would be reduced and people would be able to keep their homes.
To some extent it worked, but as would be anticipated, many banks refused to give HAMP loans. Some banks denied people who applied over and over again. Others banks lost applicants’ paperwork, or didn’t respond to HAMP applications made by homeowners at all. The foreclosure courts’ hallways were filled—and to some extent still are today—with people who pled with judges and bank lawyers that they had been unfairly denied modifications or were waiting to hear an answer to their application.
Good foreclosure defense attorneys who knew the system and the program could offer assistance, but many did not understand the program. Many homeowners failed to get help at all to try to modify their loans.
Many people lost their homes while in the middle of waiting for an answer as to whether their HAMP modification had been approved, and many found their modification applications outright denied, often for inexplicable reasons or for no reason at all.
Error In Calculation Revealed
Recently, Wells Fargo revealed what we had all suspected: due to a computer error, from 2010-2015, many people were denied modifications and thus lost their homes to foreclosure, yet who should have been approved and kept their homes.
The computer program was likely necessary to calculate the homeowner’s information and the program to determine whether a modification would fit under HAMP’s mathematically complex guidelines. That means that if even one figure or one small calculation was even slightly incorrect, the modification would be denied. Wells Fargo recently revealed that a bug in their software caused modification applications from some borrowers to be miscalculated and thus denied.
Wells Fargo was quick to point out that the computer glitch did not cause the foreclosures, but prevented about 400 people from keeping their homes.
Wells Fargo says that it has set aside about $8 million to remedy the problem, which probably means some type of payments to compensate people who lost their homes due to incorrectly denied modifications.
This is the same Wells Fargo that was fined for giving loans with incorrect income information, and that in 2016 was accused of opening credit card accounts for customers who had not applied for them.
Whether you’re looking to keep your home, or want to leave it behind without having a money judgment entered against you, it’s important to get legal help if you’re in foreclosure. Contact Jacobs Legal in Miami today to discuss every available option and defense to your foreclosure case.