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

You can Do that?

[Monkeedude1212]

I'll See Me In court!!!

Re:You can Do that?

[Excelsior]

Recently, I called Wells Fargo and told them to "Go f*** yourselves"; I didn't anticipate they would take me so literally.

Not if I see me first!

[SmallFurryCreature]

Just for this story we should be able to mod ourselves :)

Re:Not if I see me first!

[EvanED]

Yeah, but you'd immediately have to metamoderate your moderation down, so it works out in the end.

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

[FiloEleven]

It's only confusing if you assume that corporations are one monolithic entity.

In fact, they're the exact opposite of a monolithic entity.

The monolith made our monkey ancestors more intelligent. Corporations are making us more stupidity again =(

Re:Not only act of idiocy

[radtea]

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.

It's not the size, it's the stupidity.

Everything I know about management I learned from the "telephone game" we played as kids, where you whisper a message around in a circle and find that after about three hops it gets completely mangled.

Stupid people ignore this phenomenon, and go through their lives acting as if telling someone something once is sufficient to get the message across. Stupid people run stupid organizations that radically under-communicate. Some people who are both stupid and evil use this to create private fiefdoms within organizations.

Smart people recognize this phenomena, and create organizations with multiple, redundant and simple lines of communication, and work to keep policies clear and concise so they are harder to mangle in the communications process.

Organizations run by stupid people are therefore extremely complex and hard to understand, whereas those run by smart people are generally simple. This leads stupid people--who are vastly in the majority--to think that organizations run by smart people aren't very capable, because they are too stupid to realize that capability comes with simplicity, not complexity.

Corporate America is hugely invested in the myth of complexity, and hires and trains managers accordingly. Attempts to simplify are fought at every turn. This creates the kind of environment where an organization can actively pursue and defend a lawsuit against itself, by itself, rather than carrying through the pro-forma motions required by law, because the people on both sides are too stupid to consider any other possibility.

And remember: this comes down to a couple of people. They are embedded within a large organization, but it is at the end of the day just them. It isn't like there are huge teams on this. An organization with clear lines of communication and responsibility would make it easy for the people in question to talk to each other, and the issue would be resolved. But that would be smart, and there is nothing smart about the people working for American banks these days.

Re:Not only act of idiocy

[AK Marc]

Actually, it is the law. Wells Fargo is required by law to sue itself. It must file suit to forclose. It must file suit against all leinholders to clear the title. It can't do it any other way. It can't hire one firm to represent both sides, even if both sides are the same company because that's a conflict of interest, and we are have adversarial court system. And so it's in the interest of both firms to stretch out the legal proceedings to increase billing, again a legal thing. Wells Fargo is caught in the middle of bad laws written by lawyers and enforced by lawyers. And the only way out is to sue themselves. And somehow that's because the government is issuing bailouts? Wells Fargo is one of the most successful in this time. They aren't on the brink of failing, they are one buying up other institutions at fire sale prices. But bad laws and stupid Internet armchair quarterbacks make for good news. And that's what it really is about. Blaming everyone else and pointing out the stupid things, when the real problem is the voters who pick from Kang and Kodos and think there is a difference when all of them spend more than we take in on projects most people don't want. The only difference is what projects that shouldn't exist get funded these 8 years or those 4 years or whatever.

Suing yourself is collusive litigation.

[MarkvW]

Suing yourself is collusive litigation. We pay taxes to support the legal system and it is outrageous for a corporation to abuse the already overburdened judicial system resolving disputes that are not really disputes.

There must be more to this story, though. Maybe it's Wells Fargo Holding Co., Inc. versus Wells Fargo Partners, Inc. That would make sense.

Re:Suing yourself is collusive litigation.

[cbiltcliffe]

The judge is probably a Monty Python fan, and he's going to let the whole trial go through.

Then, at the end, he's going to say:

"I'm ruling against Wells Fargo, and in favour of Wells Fargo."

Then, promptly get up from the bench, and return to his chamber, all the while laughing at the sound of lawyer's heads exploding in the courtroom.

Re:Suing yourself is collusive litigation.

[tnk1]

"To make this easier, the Court has decided to give code names to the two sides in the litigation. Let the record show that the Plaintiff, Wells Fargo Bank NA, will henceforth be known as Fucktard, and the Defendant, Wells Fargo NA, will be known as Asshat. The counselors are instructed to refer to their clients by the names given by the Court in order to clarify the record. Failure to do so will result in a contempt citation.

Please proceed with your opening arguments, Fucktard."

It's a wash.

[Queltor]

Wells Fargo better make sure the loser reimburses the winner's legal expenses!

Schrodinger's Bank

[XiX36]

They will exist in both a state of winning and losing this case regardless of the outcome. Cool! I would ask why this stupidity is allowed to continue but then I remember that people like this thought credit default swaps were a pretty neat idea. . .

Florida requires it?!

[bidule]

I RTFA, and it appears that Florida requires that you sue all lien holders. Since they have 80/20 double mortgage, they have to sue themselves.

Re:Since the lawsuit was filed in Florida ...

[MyLongNickName]

Why not hire him for both sides and let him have the experience of actually winning a case?

Eh

[BSDevil]

It's actually more common than you'd think. The meat of the story is really this line:

As holder of the first, Wells Fargo is suing all other lien holders, including the holder of the second, which is itself.

Wells Fargo (holder of the senior mortgage) is trying to clear out all the subsidiary mortgage interests so that it can sell the property. In the process of doing so, it has to sue itself for record-keeping purposes - if I'm going to buy some property, I want a clear case record showing that all existing claims have been discharged. What will likely happen, however, is that junior Wells Fargo will settle with senior Wells Fargo, after doing some filings to show that it's done it's due dilligence in trying to protect it's fiduciary interest in the property.

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.

Stupidity countdown

[bperkins]

By my count, the bank is only the fifth stupidest here.
Let's count it down:

5) Wells Fargo

For getting itself in the position of having to sue itself

4) Florida State government

For writing a law that requires a bank to sue itself.

3) Al Lewis/Fox News

For writing/publishing this worthless article.

2) samzenpus

For posting this on slashdot.

1) Me

For commenting on this crap.

But if it makes you feel better, go ahead and pile scorn on the banks.

It'll take your mind off the fact that you're the real sucker.

Re:Since the lawsuit was filed in Florida ...

[Anonymous Coward]

He'd be the only one who could pull off making the case even more strange by causing both sides to lose.