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Last updated on August 3rd, 2022 at 09:21 am
Wells Fargo bank has paused their mortgage payments without their consent say about 1600 customers.
According to a letter the bank had sent to two U.S. senators in August and September the bank was unaware of the number of customers who had been affected by its practice of placing them in so-called forbearance programs.
This is raising questions about Wells Fargo’s internal controls.
The letters were obtained by NBC News, and
in July, an NBC News investigation detailed how Wells Fargo, had suspended customers’ mortgage payments without their permission during the pandemic in more than a dozen states.
This placing of customers in unwanted forbearance could harm their credit reports which would portray as though they aren’t making required payments when they actually are.
This action can also prevent borrowers from refinancing their home loans when they could take benefit of the record low-interest rates.
Wells Fargo said that it was trying to help borrowers by proactively pausing their mortgage payments.
After the NBC News report, Sens. Elizabeth Warren of Massachusetts and Brian Schatz of Hawaii, both Democrats on the Banking Committee, enquired with the bank for information about the practice, and how many customers had been affected.
Though the bank responded in August they didn’t provide lawmakers with the number of customers whose mortgage payments had been suspended without their consent.
Wells Fargo, in one of their letters, said that it was reaching out to customers where the bank does not have evidence of a clear request for a forbearance.
Out of the 1600 unwanted forbearances complaints received the bank had identified about 900 customers going through personal bankruptcy who had had their mortgage payments paused even though they hadn’t requested it.
Wells Fargo said that they have changed their practices of needing a request from the customer before providing a forbearance.
And they are adjusting credit reporting for customers who received forbearances that they had not requested.
This news reveals that Wells Fargo is yet to implement the necessary structural reforms to fix the problems.
Reference Source: Neighbor WebSJ
