Business

Wells Fargo mistakes cost people their homes

That was only the start of their problems

Raleigh News and Observer/TNS

Zsa Zsa Conyers, outside her apartment in Greensboro, N.C., with her children. Conyers lost her home when Wells Fargo mistakenly denied her a mortgage modification.
Raleigh News and Observer/TNS Zsa Zsa Conyers, outside her apartment in Greensboro, N.C., with her children. Conyers lost her home when Wells Fargo mistakenly denied her a mortgage modification.

About nine years ago, a Burlington, N.C., woman begged Wells Fargo to keep working with her to lower her mortgage payments. She had just lost her job, and the single mom was struggling to pay for the house she shared with her three kids.

The bank ultimately said no.

Her problems continued to mount. Choking back tears, Zsa Zsa Monique Conyers recalls she briefly thought about suicide, that her children would be better off without her. But she recalled thinking at the time, “I look at them in their face and be like, ‘I can’t do that. I can’t leave them like that.’”

Conyers eventually lost her home, as did hundreds of others who made similar requests to Wells Fargo. But it turns out Wells Fargo made a critical mistake when it rejected all of those requests for modifications of their mortgages.

Last year, Wells apologized and admitted it wrongly denied or failed to offer about 870 mortgage modifications between 2010 and April 2018. In approximately 545 cases, customers such as Conyers lost their homes to foreclosure.

Conyers is among the people who are now speaking out publicly about what happened to them and how their lives were upended in the aftermath of Wells Fargo’s mistakes.

A common banking practice, mortgage modifications involve lowering monthly payments on loans to make them more affordable and help people avoid foreclosure. For instance, a bank can reduce the payments while extending the life of the mortgage. Banks may make these changes when homeowners struggle to pay back their loans, such as after a job loss.

To be sure, the homeowners bore responsibility too because they failed to make their mortgage payments, often for years at a time. But Wells acknowledged it erred by not granting a potential lifeline with mortgage modifications for people who should have qualified for them.

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San Francisco-based Wells said it has set aside $8 million to compensate customers and last year began issuing checks to homeowners.

Wells blamed its modification mistake on faulty software that it said wrongly disqualified eligible applicants.

But some victims say the compensation doesn’t come close to atoning for the effect the foreclosures had on their lives. According to a class-action suit filed in December in California, a case which Conyers joined, the bank has sent checks ranging from $1,400 to $25,000.

Wells also offered free mediation to customers who believe the payments aren’t sufficient, bank spokesman Tom Goyda said in a statement.

“Prior to the errors, (Wells) had worked with most of these customers — in many cases for years — to delay foreclosure, offer modifications and provide other forms of payment relief,” he said.

“We regret that our mistake may have denied some of them another opportunity to remain in their home.”

Conyers, 51, said the bank can’t begin to replace everything she and her children lost when they had to move out of their house and in with her mother.

“I had to get rid of a whole lot of their things that they really loved and treasured, a whole lot of things that I had worked hard in getting,” Conyers said. “We downsized a whole lot.”

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On average, homeowners affected by the error hadn’t made a mortgage payment in nearly a year and a half, Goyda said, and already were in the foreclosure process when the mistake occurred.

A modification would have made mortgage payments more affordable for the customers. To be sure, though, there’s no guarantee they would have continued making their payments and avoided foreclosure.

Customers began learning about the bank’s error around last September when Wells issued apology letters containing a check. Conyers’ was for $14,500.

“We’ve carefully considered what we can do for you,” the bank said in its letter, and the payment will “help make up for your financial loss.”

Those customers and their attorneys, though, questioned how Wells Fargo determined how much it offered people.

The bank’s $8 million in total compensation works out to about $9,195 per customer. But the total compensation is what the bank initially set aside for victims and never was an estimate of what it expected to pay out, Goyda said.

The bank has not disclosed any updated compensation figures.

It is “nowhere near enough to compensate them for the damage that Wells Fargo’s conduct caused them,” says a filing in a California class-action lawsuit. The amounts indicate that Wells “is unwilling to accept full responsibility for the life-altering consequences its behavior has wrought,” the filing says.

Customers who aren’t satisfied with their payments can negotiate for more, use mediation or pursue claims through other means, spokesman Goyda said.

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Court filings also show Wells Fargo has sought to dismiss some lawsuits. In doing so, the bank has argued that all losses claimed by homeowners can’t be linked to its error.

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