foxbusiness.com:
You can't expect a bank that is dumb enough to sue itself to know why it is suing itself.
Yet I could not resist asking Wells Fargo Bank NA why it filed a civil complaint against itself in a mortgage foreclosure case in Hillsborough County, Fla.
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It would behoove the state of Florida, and any other state with similar laws, to re-examine bankruptcy procedure. Florida is going to find itself in the same empty housing crisis situation as other areas of the country. Entire neighborhoods in major cities have been abandoned by Wells Fargo after forclosure, costing an untold amount of money and creating health hazards. This bank is completely out of control in every way imaginable. It's time for every incensed tax payer, every irritated consumer and those who are just plain sick of the entire mess, to boycott. If you're a sports fan contact your favorite teams management and voice your displeasure. If you are relatively flush, dig a little deeper into your pockets and bump the bank off the charity circuit. From what I've experienced with Wells Fargo's Private Client Services officers and the way these people have handled my family's trust account with the only the banks best interest in mind, I believe just the opposite. Wells Fargo should busted down to size and go the way of Ma Bell. Nothing would please me more than to see it become a whole bunch of baby banks. This bank has created a swirling vortex between its standard banking, credit services, and assett management division. It has created a monumental internal feeding frenzy that more than crosses the line in terms of conflicts of interest. Forget bailing these narcissists out. Cut these doinks down to size by saying loud and clear: NO MORE!
Wow!! These are some pretty wild assertions. What city neighborhoods have been decimated by Wells Fargo?
If this were the case....there would be a lot of press surrounding it. The media loves stories like this.
I think you will find quite the opposite. Wells is a better corporate citizen than most. It largely avoided the sub-prime mess. It didn't participate in the 100% home loan schemes. It has a superior CRA rating. It has consistently been sited as being a very disciplined lender. Warren Buffet , av ery discerning investor, loves the company...he is its largest shareholder.
With all due respect, I'd love to see the hard evidence.
I am so glad to hear that my bank is so well managed that it is suing itself...can't decide whether to ROTFLMAO or get my money out of there and under a matress.
At least some people make money in such a situation - all of the lawyers. There could be a technicality in Florida law that makes this a proper procedure. Of course, all this could have been prevented if those making mortgage loans didn't get so greedy and ignoring common sense.
You are correct. In Florida all foreclosures are handled via the courts. It is a judical only foreclosure state. Its foreclosure process is quite different from other states.
In Florida, the process requires ALL parties with an interest in the subject real estate (that includes Junior Lien Holders)to be named in the suit. As Wells Fargo has two liens...it needs to name itself so its second lien will be recognized in the foreclosure. This is an odd arrangement...but just the way Florida foreclosures work.
Wells Fargo is following the letter of the law. It retained two legal councels to probably demonstrate (1)some arms length arrangement. Plus (2) seldom does one law firm want to represent two sides of ANY case.
Fortunately..this foreclosure process seems well seasoned and ussually involves no trial time.
In its suit against the junior lienholders... Wells Fargo (in this instance) is asking the court to validate its superior lien position..and asks that the junior liens be dismissed....so Wells can obtain free title to the property.
What the senior lienhholder is asking for here...is the same as it is pursuing in any other state in the foreclosure process... Only here, the process is a bit different.
Regarding the greedy comment..assumes you know all the details of the loan arrangement.
Recall...the borrower coined this as an investment. There are risks in investments.
There are risks in loans.
As a very small shareholder in Wells Fargo...I look at their track record..they has over time had a very low level of problem loans. Analysts say Wells is one of the most disciplined underwriters in the business...and that they have missed / didn't participate in this mortgage feeding frenzy.
Very nominal sub-prime lending. No liar loans, etc.
Still they ,like you and I, had no idea home values would plunge like they have. If they did, they would have been even more conservative.
Well, I guess I have a good idea who is going to win this one.
If this is a legitimate way to limit loss and clear title; then why are the lawyers defending the claim? Why not go through the process uncontested?
The defendant is admitting the only allegation that is relevant to clearing title, that it holds second mortgage. There is no indication what the other allegations are (or indeed, if there are any at all), but whatever they are, they are probably not necessary for the purpose of clearing title. Defendant's counsel may view them as irrelevant, factually incorrect, or excessive, and out of an abundance of caution is filing a blanket denial. In addition, if the second mortgage is securitized, WF is probably obligated to defend it to some extent, and not allow a default judgment to be entered.
I whould also have noted that filing the admission can speed things along. The admission can be filed ASAP after the complaint is received. In contrast, permitting a default to be entered would take at least the statutory reply period (typically 20-30 days, could be longer in some states) followed by a motion for entry of a default judgment. This way, WF can cut directly to a motion for summary judgment without waiting the extra weeks. By filing the admission, WF as defendant is cooperating with WF as plaintiff to expedite things.
This was the simplest way to deal with the situation. So what?
and that folks is an example of how our country has gone insane.
If the banks simply releases a lien, it cannot write off the amount as a loss. If it goes through the courts, they can write off the entire amount as a loss. Tax payers, welcome to the new method of propping up banks!
They said they would use creative methods a while back to boost banks earnings.
Current accounting and tax rules allow banks to recognize an actual loss whether it is a simple writeoff or realized through a foreclosure action. I don't know of any tax system that prohibits busineses in general from deducting actual losses from revenues -- how would you do it otherwise? It takes a loss of $1.00 to get about $0.35 of tax benefit in top corporate tax bracket, making the loss smaller, but not "boosting earnings" -- the bank still loses $0.65 And tax deductions are useful only to companies that have gross earnings to deduct them from, which Wells Fargo does not.
this is a simple case of over regulation getting in the way of the market. There really should be simpler procedures to clear a title, spending funds on lawyers to accomplish this just passes down costs to the little guy, awfully broken system.
Over regulation? We wouldnt be in this mess had we had regulation today and oversight! Where have you been since banks were de-regulated? You have a lost decade to catch up on.
Lawyers would like to see more of this.
OMG, I got my belly laugh for today...how funny!
Now who was the wise man that said..."First, kill all the lawyers"
right hand... sues ... left hand.........I give up
even more surprising are those commenting here as if this is a perfectly logical, rational way to do business.
This is the best we can do?
What would you suggest instead of impleader to clear title?
That piece reads like a sarcastic 16 year old wrote it. How troubling what discourse in American media has come to.
Yes, the author's attitude seems to be "I'm too ignorant to understand this, so I'll make fun of it."
I agree
It makes sense to do it this way. While Wells Fargo's name is on the second mortgage, it is quite possible that they have transferred some or all of the ownership rights to someone else. Mortgage securitization was very big in the mortgage business at the time the mortgage was originated. Consequently, WF might not have the legal power to sign a release of the second mortgage, and then simplest way to ensure clean title after foreclosure is a lawsuit like this. If part of the ownership has been transferred on either mortgage, WF would probably need different counsel for the interests represented by the two mortgages because of the potential conflict of interest between different owners of two mortgages. Perhaps WF is being excessively cautious, but the lawsuit makes sense.
Their next move is to use this lawsuit as an example of a frivolous lawsuit in their campaign to limit awards in Court decisions.
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First Posted: 07-12-09 12:50 PM | Updated: 08-12-09 05:12 AM