Wells Fargo Bank Sues Itself

Extreme economic problems require extreme solutions, and Wells Fargo Bank has come up with a good one. They have decided to sue themselves. Wells Fargo holds the first and second mortgages on a condominium that is going into foreclosure. As holder of the first, they are suing all other lien holders, including the holder of the second, which is Wells Fargo. It gets better. The company has hired a lawyer to defend itself against its own lawsuit. The defense lawyer even filed this answer to the complaint, "Defendant admits that it is the owner and holder of a mortgage encumbering the subject real property. All other allegations of the complaint are denied." On the website The Consumer Warning Network, Angie Moreschi wrote: "We've apparently reached the perfect storm for complete and utter idiocy by some banks trying to foreclose on homes."

Comments

Not only act of idiocy

[Coldeagle]

I'm currently in the process of purchasing a property owned by Wells Fargo, and I'm also using Wells Fargo for the mortgage. Honestly, I'm getting messages from the company that's servicing the property that the seller wants the deal closed as soon as possible, and that I need to pressure the lender! I mean honestly, this and the example listed here are a perfect example of how a bank can get so large that they can't even deal with themselves. Who would have thunk a fictitious person could develop schizophrenia!

Re:Not only act of idiocy

[iamhassi]

Don't use Wells Fargo.

I had a investment property, and the loan was sold to Wells Fargo. Several years ago I fell behind three months, so we reached an agreement and I started paying monthly again but that 3 months was always over my head. Well 2 years later the they wanted the 3 months + interest. I paid them the 3 months but didn't have the payment for the interest and continued making monthly payments. 6 months later they again wanted the interest. Told them I didn't have it so they foreclosed, but first they surprised me with a check equaling a year's worth of payments. I was told it was because they misappropriated my payments.

Two months after the house was foreclosed they put it back on the market for about 1 year's worth of payments. It's been on the market for nearly a year now.

Had they simply let me continue making payments they would have already made more than the price they're selling the house for. I'd love to just go pay for the house with cash they sent me, but it's been vandalized since and much of the $$$ was spent on purchasing and moving to a new house.

I don't think anyone at Wells Fargo knows what's going on. As a tax payer I'm disappointed that my $$$ went to a bank that wastes money.

Re:Not only act of idiocy

[PainKilleR-CE]

It also has a lot to do with the merging of two companies to create Verizon in the first place, and GTE, at least, was already like that from buying up multiple companies in the past. When Verizon was formed, the division of GTE I worked for was sold to another company, and THAT company, also having spent a lot of time buying companies, was also that way.

The company I work for now is similar, with the specific group I work for having been part of a different company a few years ago. However, they seem to handle it a little better than either of the previous companies did.

Re:Not only act of idiocy

[vlm]

I'm not sure why it's the first time you've seen it: it's always been a requirement for vehicles that I financed.

No, that's probably not the reason at all. I had a similar situation with countrywide mortgage (since bankrupt and bought out, could not have happened to a better bunch of crooks).

The deal is, if they throw out paperwork, they make more money charging fees for arranging their own insurance.

As long as they make legal action too expensive (binding arbitration by the King Of Timbuktu, etc), its cheaper for the screwed customer to remain screwed.

Somehow I dodged the bullet after mailing and faxing the info multiple times, but I guess I was just lucky. Registered mail was next. Also property insured by multiple insurers is a classic insurance fraud setup.... having my ins company yell at them might have helped.

So, if they do something incompetent, they make a little more money. Therefore, they strategically pick victims, throw out paperwork, then send multiple HELOC and refinance offers per week, with the legally mandated notification in the middle so it will hopefully be overlooked, then throw out incoming mail and faxes, then make extra money.

Re:Not only act of idiocy

[dkleinsc]

Introducing complexity into the areas around one's job is an excellent way to prevent yourself from being moved from that job. If you're someone who's still heading up the corporate ladder, that's a foolish thing to do (because that effect prevents you from being promoted), but once you reach the point where the Peter Principle starts being a factor, this becomes known as "job security". It's one of those instances where what's good for an employee is bad for a company, and it's pretty close to impossible to prevent in a large organization.

This goes for code as well: the best programmers are the ones who simplify their code as much as possible, throwing away bad code left and right. The worst programmers are the ones who use incredibly complex processes to do incredibly simple tasks (these folks are even worse than programmers who produce no code at all because of the damage they do to good programmers' productivity).

Re:Not only act of idiocy

[AndersOSU]

yes.

The court shouldn't waste it's time with internal disputes. Anytime a company sues itself the courts should automatically find for the defendant. As soon as that's the policy you won't see any of this nonsense anymore. After all, the courts have more important things to do, like wage the war on (some) drugs.

Re:Not only act of idiocy

[Bourbonium]

I have another horror story about Wells Fargo. I serve as treasurer for a non-profit organization which leased a high-speed multifunction copier/printer/scanner/fax machine in 2001 to print our newsletter. The lease was for five years and administered through Wells Fargo Financial Leasing. At the end of the five years, after paying thousands of dollars in lease payments at $300/month, they told us that to close the lease, we could either purchase the machine outright for $360, or pay $500 to have it shipped to a recycling/salvage facility in Texarkana, Arkansas. The non-profit, of course, decided to pay the $360 and contract with a local printer company to service the machine, which still worked well, even though it was no longer under warranty.

Everything seemed fine until Wells Fargo started sending us bills about six months later. Since the lease had ended and the non-profit owned the machine, I ignored the bills and just threw them away. Then I got a call from Wells Fargo demanding another paymnet of $249, saying the account was never closed and the $249 represented accrued interest. I faxed Wells Fargo all the paperwork and copies of the cancelled checks to prove that the lease had ended and that we owned the machine outright. I even used the very same multifunction machine in question to fax the paperwork back to them.

Wells Fargo insisted that the money was still owed, and continued to send invoices and made threatening phone calls. They finally turned it over to a collection agency, which made more threatening phone calls. Not wishing to harm our credit standing, I asked the board of the non-profit for authorization to pay the bogus bill and they agreed just so we could close the matter.

Then, six months later, we received a refund check from Wells Fargo for $95. Wells Fargo apparently figured out they over-charged us for some reason, but there was no explanation for the refund check nor any detailed accounting of what was being refunded or why. It was just an envelope with a check enclosed.

The board of the non-profit has now passed a resolution that we will never do any business with Wells Fargo ever again, nor will we maintain a bank account with Bank of America or any other bank that accepted TARP funds. My current task as treasurer is to move all our money out of BofA (which has been our bank since the organization was founded in 1974) and into a different bank that has not taken any taxpayer bailout money. Believe it or not, there still are a few around (e.g., Union Bank, USBank, Mechanics Bank and Pacific National Bank are four that we are considering).

Re:Not only act of idiocy

[Reziac]

And don't panic when that old car needs repairs.

On average you'll need to cough up for a major repair about every three years -- but it's still cheaper than making monthly payments.

Realworld example: average major repair on my paid-for truck: $700, once every 3-4 years. Average monthly payment on a newer truck: $400 per month, every month. Gee, which one is more economical??

Re:Not only act of idiocy

[iamhassi]

"Something's not adding up in your story."

I completely agree! The whole thing never made sense to me either

"How is it that in 2 years and 3 months, you couldn't come up with the interest on the 3 month's payments?"

I don't recall explaining how Wells Fargo calculated interest, so how would you know if it made sense or not?

" you were refunded 1 year's worth of payments, and that the house was put on the market for 1 year's worth of house payments. I'm going to have to call B.S. on this one."

Like I said, I don't understand it either.

"home went back on the market for 1/30 of its original price is a little much."

wait... what? Do you think they take the value of your house, divide it by 30 years, and that's what they charge you per year? Wow that'd be great, wouldn't it? So a $300,000 house divided by 30 would be 10 grand a year, or a $833/mo payment. Everyone would own million dollar houses.

Re:Not only act of idiocy

[gtall]

I have a horror story about Bank of America; never get near that bank without a flamethrower or a bazooka. Pa lend out some of his IRA money to various companies. The loans were in his IRA portfolio and kept at Fleet Bank. Fleet got bought by BofA and then the fun started. There was one remaining loan by that time since I had cleaned up the rest. The loan was to a microbrewery and they religiously pay their monthlies on time every month. BofA decided they had a problem with a loan in an IRA and wanted it and the IRA gone. They decided to charge $8K a year on about $64,000 worth of loan to keep it on their books and if I would like, the IRA (now the sole retirement for Ma since Pa went to the Great Food Bowl in the Sky) should be moved to somewhere else, anywhere but BofA. As they well knew, no other IRA keeper would accept an account with a loan in it, so we had to take it out in one large disbursement which caused $16,000 in taxes due to Uncle Sam. Under a typical year, Ma wouldn't pay anything. So thank you BofA from the bottom of my heart where it is cold and thinks wicked thoughts.

The Wells Fargo paradox

[Anonymous Coward]

replaces the Barbers paradox

Crazy like a fox

[russotto]

From another article on the same subject http://www.doomers.us/forum2/index.php?action=printpage;topic=48933.0

Attorney McKillop explains that to avoid suing itself a lender would typically release the lien against the property after the foreclosure goes through. By suing itself, the company avoids the step of having to file that additional paperwork. That, in effect, speeds up the time it takes to sell the property after foreclosing.

(McKillop represents the real defendant, the homeowner).

Seems like this is just a procedural trick to get the second lien dismissed during the original foreclosure case. Apparently Wells Fargo thinks it's worth paying an extra lawyer rather than having to wait for the voluntary release of the lien to go through. Pretty silly, but it is _Florida_ law at issue, after all...

Re:Schrodinger's Bank

[Landshark17]

With the added benefit that at tax time they can report huge financial losses resulting from losing the lawsuit, while simultaneously report to their stockholders on their windfall from winning the lawsuit.

Re:seriously?!

[$RANDOMLUSER]

Or the latest from SCO.

Re:Eh

[Todd Knarr]

They could, except that then other lienholders could scream "Preferential treatment!" and delay things or force Wells Fargo to give them preferential treatment too. Remember that if WF succeeds in this action, all those other subsidiary lienholders will end up holding worthless paper, and WF doesn't want to give them anything they can use against WF. If WF treats itself exactly the way it treats the others and follows exactly the same procedures, that takes away one thing those other lienholders can use to try and derail the proceeding.

Advice from the past

[ellbee]

"The first thing we do, let's kill all the lawyers". - (Henry VI Act IV, Scene II - Shakespeare, ca. 1623). Good idea then, good idea now.

Re:You can Do that?

[Majik Sheff]

Wells Fargo has made so much money charging their customers fees (I think there might be a fee for fee processing) that they not only didn't need to take bailout money, they can afford to build a nice shiny corporate office with heated sidewalks. HEATED SIDEWALKS.

When I found out that my bank was being bought by Wells Feego I changed banks. When I went in to close the account, they asked why. When I told the teller it was because of the impending transfer she told me she was planning on quitting on the day of the changeover.

A good friend of mine worked in their credit card department for a very short while, he had to quit because he wasn't getting any sleep.

I hope W.F. sues itself into oblivion. This is one time I'll actually cheer for them to win a lawsuit. Let's go for quadruple damages while we're at it and see to it that the lawyers get an 80% fee on the proceeds.

Re:You can Do that?

[Mister Whirly]

Not as outrageous as Wells Fargo wanting the Minnesota Department of Transportation to build an exit ramp off Interstate 35W because their corporate offices are a whole 4 blocks away from the currently existing exit.

Re:You can Do that?

[R3d M3rcury]

While I'm not necessarily a fan of Wells Fargo, I gotta admit I'm finding this curious:

Wells Fargo has made so much money charging their customers fees (I think there might be a fee for fee processing) that they not only didn't need to take bailout money, they can afford to build a nice shiny corporate office with heated sidewalks.

Okay, let me get this straight. Because Wells Fargo made so much money--and doesn't appear to have lost too much money during the mortgage crisis or at least hasn't lost more money than they made--they didn't need to get bail-out money, saving taxpayers money. Perhaps this is in contrast with other banks that didn't charge fees and made poor choices during the mortgage crisis and needed bail-out money from the taxpayers.

Wells Fargo made lots of money by charging their customers for service, which is sort of the idea of a company which provides a service. You may argue the amounts, and I might agree with you. But they charged the amounts they charged and let the market decide whether they were worth it. You decided they weren't worth it and took your business elsewhere, which is your choice.

Tell me, did the bank you switched to need to take taxpayer money? Have they been absorbed by some other bank?

Re:You can Do that?

[AK Marc]

Wells Fargo is one of the most popular banks in Alaska (having bought out Bank of Alaska), and I think they use heated sidewalks in some locations. They are cheaper and safer than shoveling, and can be better for the environment than chemicals. They usually run off heated water from natural gas fired boilers, not electricity. But that may vary by location. We get more than 100 inches of snow a year in Anchorage.