Michaela Christian lost a long battle with Wells Fargo in 2013 to save her Las Vegas home, a defeat she says changed the course of her life. When the bank refused to modify her mortgage, Christian moved in with a friend and scrambled to rebuild her life.
Five years later, Wells Fargo admits it made a mistake. Christian, 46, qualified for the kind of mortgage help that may have saved her home after all.
It is a mistake the giant bank admits it made nearly 900 times over several years, pushing hundreds of distressed homeowners into foreclosure.
Christian said that when she learned of Wells Fargo’s error, “I was sick to my stomach.”
“They destroyed me and destroyed my everything.”
Wells Fargo’s admission is part of a cascade of lapses that increased scrutiny of the San Francisco bank with some Democrats in Congress calling for the ouster of its chief executive, Tim Sloan. Over the last two years, the bank paid more than $1 billion in fines after admitting it opened millions of bogus accounts customers didn’t want and then found itself in more trouble after improperly repossessing thousands of cars.
The bank has repeatedly apologized for its missteps but is struggling to repair its image. Customers who lost their homes are being offered compensation or can enter mediation, company officials say.
Wells Fargo says an internal review found the bank denied help to hundreds of homeowners after fees charged by foreclosure attorneys were improperly used when the bank determined whom to offer mortgage help. The computer error began in 2010 and was not corrected until last April, the bank said.
Overall, 870 homeowners were denied help for which they qualified, including 545 who lost their homes to foreclosure. Wells Fargo says it has reached most of the customers affected and set aside $8 million to compensate them, though industry analysts say that number is likely to increase.
The revelation echoes the complaints of thousands of borrowers in the years after the financial crisis that banks were stingy about offering help with borrowers’ exploding loans.
Too big to fail? Wrong. Nationalization was a far more appropriate response, as these big banks continue screwing over everyday people without consequence except bigger bonuses and higher executive pay.