Wells Fargo Class Action Says Software Glitch Cost a Couple Their Home

Wells Fargo failed to compensate consumers for mortgage modification denials stemming from a software glitch, according to a recent class action lawsuit.

In August 2018, Wells Fargo revealed that a glitch in its mortgage loan modification software resulted in around 625 applications being denied.

This figure was later raised to 870 and allegedly included Washington couple Monty and Michelle Coordes.

The Coordeses say they applied for a mortgage modification after Monty became unemployed in 2010 due to the recession. Their application was reportedly denied due to the Wells Fargo software glitch, resulting in the Coordeses losing their home to foreclosure.

Due to these injuries, and Wells Fargo’s alleged mishandling of the situation, the family has filed a class action lawsuit against the bank.

The couple argues that Wells Fargo knew about the software glitch but concealed it for three years after discovery.

According to the Wells Fargo class action lawsuit, the bank “should have reasonably known upon discovery of the software error that the resulting harm would continue for several years,” but failed to do this and instead “withheld the information and did not act to repair the credit reports of the Coordeses” and other consumers affected by the breach.

Wells Fargo claims that it is working to contact affected individuals to reach a resolution for damages allegedly sustained from the breach.

“We’ve been reaching out to customers through a dedicated single point of contact and mail to proactively provide remediation and to discuss their options, including the ability to request a no-­cost mediation through an independent third party if they are not satisfied with what we’ve offered,” a spokesperson from Wells Fargo told Law360.

“While we would prefer to work directly with each customer to resolve the matter, if they aren’t satisfied with the remediation we’ve provided and/or the outcome of the mediation they still are able to pursue other legal options.”

Although the bank set up a $8 million remediation fund to compensate affected borrowers, the Coordes family argues that Wells Fargo owes their consumers more. The family received $25,000 from the remediation fund but they argue that this was not enough to compensate them for their economic injuries. The couple seeks further compensation in their lawsuit against the bank.

Monty and Michelle Coordes seeks to represent a Class of individuals who applied for mortgage modification from Wells Fargo between Apt. 13, 2010 and Oct. 20, 2015, but were denied due to the reported software glitch.

The Coordeses and the proposed Class are represented by Derek W. Loeser, Chanele N. Reyes and Matthew J. Preusch of Keller Rohrback LLP.

The Wells Fargo Mortgage Modification Class Action Lawsuit is Coordes v. Wells Fargo and Co., Case No. 2:19­-cv­-00052, in the U.S. District Court for the Eastern District of Washington.

UPDATE: On Oct. 18, 2019, a class action lawsuit filed against Wells Fargo related to a software malfunction that made some mortgage borrowers lose their homes will continue after a U.S. federal judge denied the bank’s motion to dismiss.