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That 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 valu

That 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 ago
More 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 ago
  Seems more like pushing them over. Foreclosure isn’t a natural phenomenon. Wells Fargo had to make it happen.
  - JackFr 8y ago
    True, 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 ago
      Right, 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.
onetimemanytime 8y ago
Banks don't care about such lawsuits...after 4 years they'll settle while agreeing that lawyers take the largest slices of the pie. Cost of doing business.

WillPostForFood 8y ago

More 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 ago
Seems more like pushing them over. Foreclosure isn’t a natural phenomenon. Wells Fargo had to make it happen.
- JackFr 8y ago
  True, 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 ago
    Right, 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.

onetimemanytime 8y ago

Banks don't care about such lawsuits...after 4 years they'll settle while agreeing that lawyers take the largest slices of the pie. Cost of doing business.