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Wells Fargo says hundreds of customers lost homes after computer glitch
- foobarian 8y agoInteresting that mistakes like this tend to be in the big co's favor. You never read about 400 people getting a free home due to a bug.
- setquk 8y agoI saw a lot of people paid 20% more commission once due to a bug. They honoured the payments as well.
- 13of40 8y agoI think the right analogy would be that 400 people just barely avoided foreclosure because of a bug. It might have already happened and nobody heard about it because neither Wells Fargo nor the homeowners had any reason to publicize it. (Or neither were aware of it.)
- booleandilemma 8y agoI know someone who got extra money out of an ATM once. They kept it, which I’m not sure they would have done if it was a human teller, but it’s different when you’re dealing with a machine.
- hundt 8y agoI know someone that had the same thing happen. They tried to return it but the bank employee insisted it was impossible.
- deleted 8y ago[deleted]
- wmf 8y agoThere are stories about people who stopped paying their mortgage and got away with it because the mortgage had been resold several times and there wasn't clear paperwork about who owned it. But these may be urban legends.
- lisper 8y agoNope, it really happened: https://www.nytimes.com/2009/10/25/business/economy/25gret.html https://www.nytimes.com/2009/10/25/business/economy/25gret.h...
- DamnInteresting 8y agoTo spare a few the arithmetic: Wells Fargo set aside $8 million for compensation; divided among 400 persons, this works out to $20,000 each.
- deleted 8y ago[deleted]
- JackFr 8y agoThat actually sounds like a pretty reasonable amount, given that the borrowers likely had close to 0% equity in the homes they owned.
- jabwork 8y agopunative damages could exceed that under a lot of conditions
- bogomipz 8y agoI guess you don't realize that closing costs on a home are between 2 and 5% of the purchase price? There's something called the "the five year" rule, which is generally considered the amount of time it takes to recoup the closing costs of a home purchase [1] Now add the price of two relocations - moving into the house and moving out of the house. These folks are like if they net anything more than a few grand on this. [1] https://moneyning.com/housing/the-five-year-rule-for-buying-a-house/ https://moneyning.com/housing/the-five-year-rule-for-buying-...
- denimnerd 8y agoi work for a bank. my coworkers are mostly not very competent. also sometimes when we move to a new system we don’t get the actual business logic. we just reverse engineer it from the data. the people who knew how it worked were laid off a long time ago
- selestify 8y agoWhy is that? Is it because of low pay?
- Spooky23 8y agoGovernment style bureaucracy with MBA management culture, heavy risk management, and constant growth by acquisition. Some roles pay very well, but are inflexible and boring. I knew a guy making $180k as a contractor to be a storage engineer. His entire job was fulfilling SAN zoning requests. He ended up bootstrapping a startup just to stay sane.
- denimnerd 8y agoYeah there’s a thousand vice presidents at my location that make 160k which in TX is a high wage. they don’t have high productivity compared to a real tech company. it’s all manual bureaucratic work.
- Spooky23 8y agoI had a grand-uncle was a bank Vice President. His main responsibility was reading the obituaries of about 25 papers and making sure relatives didn’t open the safe deposit boxes before probate. Not sure of salary, but his schtick was 12 month leases of black Cadillacs, so it was pretty good. :)
- denimnerd 8y agovp is nothing at a bank but i guess it looks good on a resume lol
- kown223 8y agoBuy Bitcoin, let the crooked bans.
- gallerdude 8y agoDon't confuse evil for incompetence.
- doc_gunthrop 8y agoThere's a scene in The Big Short involving discussion over the rise in subprime mortgage bond prices despite an increase in mortgage defaults: Mark Baum: "That's not stupidity. That's fraud." Jared Vennett: "Tell me the difference between stupid and illegal, and I'll have my wife's brother arrested."
- maxxxxx 8y agoWith a company like Wells Fargo that's moving from scandal to scandal I wonder when is it enough and we should just close the company? They repeatedly have demonstrated that they are not able to engage in ethical business practices.
- catacombs 8y agoSadly, they are too big to close/fail.
- DareRight 8y agoOk. How about we forgive every outstanding mortgage they hold? They're so big, they can take a hit, right? What's that? They don't hold many mortgages? They sell them all upstream? Then why are they foreclosing? But it's a good point that they have such easy access to the secondary market. How about we cut that off, too? Maybe they are too big to fail overnight. But we can do it in bites. Diminish one piece of their business at a time. Eventually (sooner than you think) they can be trimmed back to a manageable size. But we should start right away. With their track record, each new infraction should result in the death penalty for some piece of their empire. Then again, we don't need the government to punish them. We just need account holders to close their accounts. If people are not willing to do this, why should the government that represents those people get involved? One reasonable thing that the government could do is require WF to pay the refinance fees for anybody who wants to move their mortgage (or even the servicing of their mortgage) away from WF. Then people can impose a personal penalty on WF without any cost to themselves except the time and effort to go through the process. If we are fed up enough, we could even require WF to buy down the refi to the same interest rate. But that would only benefit recent mortgages who should have known better to begin with.
- maxxxxx 8y ago"Then again, we don't need the government to punish them. We just need account holders to close their accounts. If people are not willing to do this, why should the government that represents those people get involved?" Because we have decided that it's easier for everybody if we set standards for businesses so we can trust them to act ethically. When you go to a restaurant you generally can be confident that you won't get poisoned. So if you are a Wells Fargo customer you should be able to trust that you don't get screwed over. It's not realistic to put the burden of monitoring business practices on the individual person. If you ever have dealt with buying a house or medical stuff you should know that understanding the transactions completely would probably be a full time job. That's why we have regulations and laws so people can spend their time more productively.
- fencepost 8y agoThat 20k per foreclosure is probably not going to even cover Wells Fargo's legal expenses following this. They're going to be sued not just for the loss of value/equity caused by a foreclosure but for the ongoing costs of loss of a home - possibly more expensive shorter term housing, the credit damage of a foreclosure (and increased costs due to that), legal expenses, possible loss of employment due to having to move or having no stable home, etc. What Wells Fargo did was take people already on the edge and throw an anvil at them.
- WillPostForFood 8y agoMore like it took people already over the edge, and didn't throw them the rope to pull them back. These were people already going down in foreclosure, who didn't get special assistance. Very bad, but not an anvil.
- mikeash 8y agoSeems more like pushing them over. Foreclosure isn’t a natural phenomenon. Wells Fargo had to make it happen.
- JackFr 8y agoTrue, foreclosures need to be initiated. What should a bank do about a mortgage thats 3 months delinquent? Should they just stop collecting? If its possible that they can reasonably modify the loan to terms that make repayment feasible, they should as it's a win-win, not because they are contractually obligated to in any way. But if given what they know about the property and the borrower's income, there is no feasible way to mod the loan, prudence requires that they foreclose. This "bug" mistakenly put people in the wrong category.
- mikeash 8y agoRight, so, instead of helping people back from the edge of the cliff, they shoved them off. The answer to your question seems to be that they should examine the account and offer a loan modification if certain conditions are met. They failed at this for these people. That other people aren’t eligible for modification and would be foreclosed on regardless is not relevant here.
- 40acres 8y agoCan't wait for the next round of apology commercials.
- rconti 8y agoEstablished 1852. Re-established in 2018. Re-re-established in June 2018. Re-re-re-established in August 2018.
- kpwagner 8y agoIn my experience, mortgage originators rely on box-checking to get mortgages to pass. They make no decisions; it's an amoral, automatic process which happens to be much less efficient than it could be as the industry clings to the idea that homebuyers need to talk to someone on the phone and the people in seats are actually necessary. Around 2013, WF Mortgage denied me a refinance on a property. It was my primary home (high-rise condo) when I bought it, then it became a rental. The reason for the denial was, my condo unit was in the same building as a hotel (downtown in a city), so it was labelled a "condotel". This was a shock to me. After researching condotels, I explained that the definition did not fit my property, but it didn't matter to WF. This was frustrating to me because WF originated the original mortgage when I purchase the property in 2007, and I never missed a payment. The refinance would lower my payment significantly due to lower interest and a large chunk of the principal that I paid down. They did not care at all. They all but told me to fuck off and stop calling them. It was like they wanted anti customer loyalty. I used Quicken Loans for the refinance--no problems.
- mikec3010 8y ago> due to lower interest well, follow the money. why would they sell you a product that makes them less money if they have a material reason to deny it? Think like an insurance company: if you have a technical reason to deny paying a claim, you should absolutely do so, because it means less money for you (the ins. co).
- lordnacho 8y agoThis is not logical. WF now makes nothing from the financing of the place rather than simply less than originally. They should understand that there's a market and someone else will do the refi.
- deleted 8y ago[deleted]
- mikec3010 8y agoI missed the last sentence where he said he went with a competitor
- rkagerer 8y agoI'm chronically ashamed by the degree of tolerance to shoddy work in our field. If software engineers were held to the same standard as civil engineers, people would go to jail. I empathize humans make mistakes, but I've also known programmers who just don't care about striving toward perfect, bug-free code. In some cases it's just a job not a passion, in others they're overworked and learned it doesn't pay to go slowly and correctly. Kudos to all of you true craftsmen out there who do take care and pride in the quality of your work.
- dgzl 8y ago> Held to the same standard as civil engineers Impractical comparison. Software engineers rarely create works where loss of life, or even physical harm, is a side effect of poor workmanship.
- rectang 8y agoIs losing your home insignificant? I would be shocked if out of hundreds of foreclosures, there were no suicides.
- dgzl 8y agoIn this case, you could loosely say that foreclosure was a direct result of the software bug. Suicide would be an indirect result. Where if a bridge were to collapse, then death would be a direct result.
- geggam 8y agoReally ? Everything I use today seems to have some micro processor thing in it. Cars can run into things and typically this causes damage and can cause loss of life, as an example where bugs can kill folks.
- dgzl 8y agoYour example with cars would only make sense if a software bug put a driver in direct danger without giving them time to be responsible and mitigate the danger. In almost all situations, even with modern technology in cars, it's the driver's responsibility to drive/steer/brake to mitigate the danger. How many pieces of software exist in this world where there is zero chance of even a catastrophic bug causing harm to humans? I would bet most of the existing pieces fit this description. Now apply that question to works of civil engineering, and you have a different picture.
- makecheck 8y agoWhen the result of a decision is to kick someone out of their damned home, why the hell isn’t it someone’s job to read that family’s file cover-to-cover before pulling the trigger? That is NOT the time to rely on any auto-push-button software.
- a3n 8y agoBecause it would cost money to pay someone to read the file. For a corporation, every moment is the time to rely on auto-push-button, wage avoiding software. Corporations are amoral at best.
- confounded 8y agoDo you Bank with Wells Fargo? I do. I’ve beeen gradually winding down my account, and will soon feel even better than I did when I got rid of Comcast. Check out the Credit Unions in your area. They’re usually great!
- Zelphyr 8y agoGood for you and you should celebrate when you finally close your account. I’ll go so far as to say that anyone who willfully banks with Wells Fargo has blood on their hands. This is an immoral company. To say that you won’t switch banks because they’re all just as bad is absurd. That’s just a lazy excuse by a lazy person in my opinion. I’ll take downvotes for my negative post but Wells Fargo screwed me any my family over severely during the recession and it took years to dig out of that mess. Not a single Wells Fargo employee so much as feigned an apology.
- throw2016 8y agoThis 'glitch' feels like a stretch. People were going to lose their homes so they would have followed up with the bank, so there would be support staff, escalations, and multiple departments and chains involved to fix any genuine glitch, so is Well Fargo saying that their entire process failed? For instance if a billion dollars lands in your account, do you think there will be no process to fix the 'computer glitch'?
- brokenmachine 8y agoYes, funny how these errors seem to always work out in the big company's favor.
- ilaksh 8y agoThis affected my sister's friend supposedly. He's been living with her and her family for the last few months. Nice guy, but it is a bit awkward having this stranger show up whenever she stops by with the rest of her family.
- MatthewWilkes 8y agoI know GDPR isn't very popular with some users of this site, but the rights related to automated decision making are a wonderful thing.
- spootie 8y agoDid this happen to you? If you or anyone you know lost a home because of Wells Fargo’s error, reporter Deon Roberts would like to hear from you. Contact him at deroberts@charlotteobserver.com or (704) 358-5248.