(Reuters) - A Wells Fargo & Co mortgage unit will pay $3.45 million to some customers because of a processing error that delayed the mailing of letters to almost 8,000 homeowners in bankruptcy and shortened their notice period about changes to monthly mortgage payment amounts, according to a court document.
The unit, called Wells Fargo Bank NA, agreed on the sum in a pact with the Department of Justice’s U.S. Trustee Program, which oversees the country’s bankruptcy system, according to a letter from the bank filed in U.S. Bankruptcy Court in Greenbelt, Maryland.
Wells Fargo agreed to fix the mailing error and give credits and refunds worth $3.45 million to affected homeowners.
Inquiries by an independent compliance monitor hired by the bank as part of an $81.6 million settlement with the Justice Department last year uncovered the problem, said Cliff White, director of the U.S. Trustee Program’s executive office, in a statement. [L1N13025Y]
In that agreement last year, Wells Fargo settled claims that it denied thousands of homeowners a chance to challenge mortgage payment increases imposed during their bankruptcy proceedings.
The latest $3.45 million deal reached with Wells Fargo supplements that settlement, the U.S. Trustee Program said. The bank also has agreed to expanded compliance monitoring.
A Wells Fargo spokesman said it self-reported the mailing delay to the U.S. Trustee Program upon learning of the problem and that it is providing timely delivery of documents.
Reporting by Suzanne Barlyn; Editing by Bill Rigby