Wells Fargo Mortgage Modification “Glitch” Litigation
Coordes v. Wells Fargo & Company, Wells Fargo Bank, N.A., and Wells Fargo Home Mortgage
United States District Court Eastern District of Washington, Spokane Division
Case No. 2:19-cv-00052
In March 2009, as a result of the economic downturn, the government established a series of programs to assist financially struggling homeowners. One such program was the Home Affordable Modification Program (also referred to as “HAMP”). The purpose of HAMP was to enable borrowers, after meeting certain eligibility requirements, to modify their home loans to a more manageable level. Between April 2010 and October 2015, HAMP eligible homeowners contacted Wells Fargo and requested loan modifications. They completed their applications as required by HAMP; upon review by Wells Fargo’s underwriting departments, their applications were denied. As a result, many lost their homes and suffered other related damages.
In 2018, Wells Fargo discovered that its underwriting software used in their mortgage loan modification calculation was defective. Due to Wells Fargo’s faulty software, and resulting faulty calculations, a large number of qualified HAMP loan modification applications had been erroneously denied. In August 2018, after discovering the software glitch, Wells Fargo disclosed to the U.S. Securities and Exchange Commission that it improperly denied many of the HAMP modification applications it had received between April 2010 and October 2015. Initially, Wells Fargo thought that their mistake had only impacted 625 customers; however, by November 2018, Wells Fargo confirmed that in fact their error had caused 870 Wells Fargo customers’ applications to be rejected, thus causing many if not most to lose their homes. Beginning in 2018, Wells Fargo sent notices to the customers who had been denied, apologizing for their mistake, offering to mediate the customer’s loss and enclosing a small and insufficient check. An excerpt of this letter can be seen below:
In February of 2019, Keller Rohrback filed a proposed class action complaint against Wells Fargo in the Eastern District of Washington on behalf of Plaintiffs who were denied a mortgage modification as a result of this unfortunate “glitch.”
February 15, 2019: Keller Rohrback, on behalf of Washington State, filed a class action complaint in the United States Eastern District Court Spokane Division. You can review the complaint in the “Case Documents” section below.