Wells Fargo has agreed to pay a $250 million fine after an investigation by federal banking regulators found fault with the bank’s practices for helping homeowners who are having trouble paying their mortgages.

In announcing the fine, the Office of the Comptroller of the Currency said Wells Fargo had failed to establish an effective home lending loss mitigation program, and that it had uncovered mistakes the bank made when offering loan modifications to homeowners.

Michael J. Hsu

“In addition to the $250 million civil money penalty that we are assessing against Wells Fargo, today’s action puts limits on the bank’s future activities until existing problems in mortgage servicing are adequately addressed,” Acting Comptroller of the Currency Michael J. Hsu said in a statement. “The OCC will continue to use all the tools at our disposal, including business restrictions, to ensure that national banks address problems in a timely manner, treat customers fairly and operate in a safe and sound manner.”

The OCC said Wells Fargo also violated the terms of a 2018 consent order that required the bank to develop and implement “an effective enterprise-wide compliance risk management program,” after uncovering problematic practices in its auto lending business.

Charlie Scharf

In a statement, Wells Fargo CEO Charlie Scharf said, “Building an appropriate risk and control infrastructure has been and remains Wells Fargo’s top priority.” Scharf acknowledged that the OCC’s actions “point to work we must continue to do to address significant, longstanding deficiencies.”

In a consent order, the OCC said it found “significant deficiencies” in Wells Fargo’s loss mitigation practices — procedures that it employs when homeowners have trouble making their monthly mortgage payments.

Wells Fargo’s “loss mitigation decisioning tools” — software applications and end-user computing tools — contributed to “errors in the bank’s loss mitigation processes and controls that negatively affected borrowers,” regulators said.

In offering loan modifications to borrowers, Wells Fargo has made mistakes that it has failed to “detect, prevent, and quantify” in a timely manner, impairing the bank’s ability to “fully and timely remediate harmed customers.”

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