In a filing about its third quarter results with the Securities Exchange Commission [1] (SEC) on Tuesday, Wells Fargo Bank [2] said that it has had a constructive dialogue with and received detailed feedback from the Federal Reserve Board regarding its governance oversight and compliance as well as operational risk management plans.
However, to be able to incorporate this feedback into the plans and to "complete the required third-party reviews, which were initially due September 30, 2018, the Company is planning to operate under the asset cap through the first part of 2019. A second third-party review must also be conducted to assess the efficacy and sustainability of the improvements," the bank said in its filing.
While reporting on the various initiatives Wells Fargo has undertaken to rebuild its trust with the consumers, the bank reported that an expanded review of the use of its mortgage loan modification underwriting tool had revealed that the software error reported by the bank in August had affected more people than what was estimated earlier.
As a result, 245 more customers were impacted by this error. Wells Fargo reported that counting the new customers that the expanded review found, a total of 870 customers were incorrectly denied a loan modification or repayment plan in cases where they would have otherwise qualified. Additionally, the bank reported, in approximately 545 of these instances, after the loan modification was denied or the customer was deemed ineligible to be offered a loan modification or repayment plan, a foreclosure was completed.
"Today, we disclosed that a subsequent, expanded review identified additional customers whose mortgage modification decisions were impacted by related foreclosure attorneys’ fee errors," a Wells Fargo spokesperson told DS News. "We’re very sorry those errors occurred and have contacted a substantial majority of the affected customers to provide remediation as well as the option to pursue no-cost mediation with an independent mediator."
While the bank reported in its filing that it would continue to assess any customer harm and provide remediation "as appropriate," it continued to make efforts towards identifying other instances in which customers may have experienced harm and that it was possible that it would "identify other areas of potential concern."
Speaking on the next steps that the bank planned to take, Wells Fargo said that it planned to work with each customer to arrive at a resolution that addressed their particular situation. "Every customer situation is different. As part of our process, we have assigned a single, dedicated point of contact to ensure that each customer is engaged with and cared for individually."