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Wells Fargo may have accidentally foreclosed on 400 homes

SAN FRANCISCO, California (KETK) - Wells Fargo & Co., which spent much of 2017 apologizing for various kinds of bad banking behavior, is now apologizing for yet another "error" - accidentally foreclosing on some 400 homes.

In a regulatory filing late Friday, the bank disclosed that about 625 customers who were struggling with their mortgages were denied loan modifications they sought from a federal program to help homeowners avoid foreclosures.

Of those 625, nearly 400 lost their homes to foreclosure due to what the bank is calling an "automated calculation error," or a software glitch.

CNBC is reporting that the bank has set aside $8 million to compensate those affected by the glitch, which occurred from 2010 to 2015.

The bank also is facing a government inquiry into its purchase of low-income housing credits, according to the Friday filing.

Government agencies are examining how Wells Fargo negotiated and purchased certain federal low-income housing tax credits in connection with the financing of low-income housing developments.

The San Francisco-based bank didn’t identify the agencies in the filing.

Wells Fargo has been mired in controversy since 2016, when regulators said the bank had opened millions of accounts without customers’ permission. The bank agreed to pay $185 million in penalties and $5 million to customers in that case and then fired 5,300 people over the scandal, including the ouster of its CEO and several top executives in consumer banking.

Just last week, in a separate settlement with the U.S. Justice Department, the bank agreed to pay a $2.1 billion fine for issuing loans it knew were based on false income information.

In June, Wells Fargo was accused by the federal Securities and Exchange Commission of using complex financial investments to take advantage of mom-and-pop investors.

In February, the Federal Reserve slapped Wells Fargo with a cap on its assets, in effect banning its further expansion until the bank cleans up its act to the regulator’s satisfaction.


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