Hundreds of Wells Fargo customers lost their homes because of a computer glitch which denied creditors at risk of foreclosure modifications to their loan terms.
In an SEC filing posted last week, the bank revealed that the coding error hit struggling customers over a five-year period between April 13, 2010, and October 20, 2015.
"This error in the modification tool caused an automated miscalculation of attorneys’ fees that were included for purposes of determining whether a customer qualified for a mortgage loan modification," says the bank. "As a result of this error, approximately 625 customers were incorrectly denied a loan modification or were not offered a modification in cases where they would have otherwise qualified."
Wells Fargo says 400 customers subsequently lost their homes as the bank foreclosed on the loans.
The bank says it has set aside $8 million to compensate customers forced out of their homes.