Wells Fargo says a computer glitch is partly to blame for an error affecting an estimated 545 customers who lost their homes. The giant bank filed papers with the Securities and Exchange Commission last month, revealing it incorrectly denied 870 loan modification requests. About 60 percent of those homeowners went into foreclosure.
Legislators, housing advocates, regulators and most importantly, the people who lost their homes – people like Jose Aguilar – are asking how this happened.
“It’s been very hard for me. It’s something I wouldn’t wish upon anybody,” Aguilar told CBS News correspondent Anna Werner.
These days, Aguilar can only drive by the home he and his family lost to foreclosure three years ago, the small ranch house in upstate New York where they wanted to raise their children.
“I used to look there and see how many times my kids and I used to run up and down, ride our bikes,” Aguilar said.
He said the problems began when he and his ex-wife found mold in the house. He tried to remediate it himself but fell a few months behind on the mortgage payments. So the couple asked their lender Wells Fargo to modify their loan to lower their monthly payment.
“At first they told me, ‘OK, you know, you might be able to qualify for a loan modification,'” Aguilar said.
But he said then came the delays – weeks, then months – waiting for a decision.
“Then the whole process just started all over again. And then it got to the point we were a year behind,” Aguilar said.
Finally, Wells Fargo turned them down.
“What was your reaction, I mean, after all that time?” Werner asked.
“At that point I just gave up,” Aguilar said.
He and his wife split up. The house went into foreclosure. With the hit to his credit, Aguilar said he found no one would rent to him.
“At that point my son and I had to move to the basement of a friend’s house and we stayed there for three months, and we had nothing. We had a couch and my son had a bed,” Aguilar said, choking up with emotion. “I felt worthless. I felt like I had let my family down.”
Then in September this year, nearly three years later, he got a letter from Wells Fargo. “Dear Jose Aguilar,” it read, “We made a mistake… we’re sorry.” It said the decision on his loan modification was based “on a faulty calculation” and his loan “should have been” approved.