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Wells Fargo Bank Sues Itself 445

Posted by samzenpus
from the so-crazy-it-just-might-work dept.
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."

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Wells Fargo Bank Sues Itself

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  • by Monkeedude1212 (1560403) on Monday July 13, 2009 @01:41PM (#28679433) Journal

    I'll See Me In court!!!

    • by SmallFurryCreature (593017) on Monday July 13, 2009 @01:42PM (#28679465) Journal

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

    • Re: (Score:3, Funny)

      by tmosley (996283)
      And when I can't pay up, I'll just ask the government for another bailout to pay the attorney fees and damages!

      When a bailed out bank sues itself, we lose.
      • Re:You can Do that? (Score:5, Interesting)

        by Majik Sheff (930627) on Monday July 13, 2009 @02:59PM (#28680757) Journal

        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? (Score:5, Informative)

          by Dragonslicer (991472) on Monday July 13, 2009 @03:34PM (#28681261)

          they can afford to build a nice shiny corporate office with heated sidewalks.

          Where's the office? If it's in the northeast or northern mid-west, heated sidewalks are a great idea, since they'd be much more reliable, be safer, and require less human work than having the grounds staff out there with salt, sand, and ice chippers (whether or not they're better environmentally than salt and sand would depend primarily on where the building gets its electricity from). My parents' house has a heater under the front stairs and porch to keep it free of ice in the winter, and I wish the university I went to could move around some of the underground steam pipes to help clear more of the sidewalks; it was funny seeing patches of bare sidewalk in the middle of the winter where the pipes went under them.

          As for suing themselves and even hiring a lawyer to defend the lawsuit, well holy shit, that's hilarious.

          • Re: (Score:3, Insightful)

            by R3d M3rcury (871886)

            Well, their corporate offices are in San Francisco. That said, a quick look at google gives us various applications for Wells Fargo to have heated sidewalks in their Des Moines, Iowa office, where they have an average of 32 inches of snowfall during the winter.

            I'm sure electrically heated sidewalks are cheaper than paying some guy to shovel the snow.

            • Re:You can Do that? (Score:4, Interesting)

              by AK Marc (707885) on Monday July 13, 2009 @07:42PM (#28684413)
              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.
        • Re: (Score:3, Informative)

          by goaliemn (19761)

          Heated sidewalks are not that outrageous in the midwest. Its cheaper to heat them and keep them ice free vs the possible liability of someone slipping and falling. Lots of older sidewalks in downtown st paul are heated. They put the steam pipes close enough to the surface that the steam basically heats em.

        • Re:You can Do that? (Score:4, Interesting)

          by Mister Whirly (964219) on Monday July 13, 2009 @03:56PM (#28681627) Homepage
          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? (Score:4, Interesting)

          by R3d M3rcury (871886) on Monday July 13, 2009 @05:24PM (#28682883) Journal

          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?

    • by Excelsior (164338) on Monday July 13, 2009 @02:38PM (#28680491)

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

  • Latest news (Score:5, Funny)

    by Yvan256 (722131) on Monday July 13, 2009 @01:42PM (#28679457) Homepage Journal

    Sales of mattress have started picking up again.

  • seriously?! (Score:5, Insightful)

    by evilkasper (1292798) on Monday July 13, 2009 @01:42PM (#28679469)
    This sounds like something out of HitchHikers or a Python sketch.
    • Re: (Score:3, Interesting)

      by $RANDOMLUSER (804576)
      Or the latest from SCO.
  • by Coldeagle (624205) on Monday July 13, 2009 @01:42PM (#28679471)
    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!
    • by scubamage (727538) on Monday July 13, 2009 @01:46PM (#28679537)
      If you think that is bad, I pray that you never have to deal with Verizon at a corporate level. So many divisions, and each one is run like its own company and is completely separated from the others. It's pathetic.

      Congrats on the purchase, btw! :)

    • by AndersOSU (873247) on Monday July 13, 2009 @01:47PM (#28679569)

      Too big to not fail?

    • by tylersoze (789256)
      Yeah I don't know what's going on at Well Fargo. I have an auto loan through the company and they just sent me a letter telling me that I better make sure I have them listed on my insurance as something or other or they would purchase their own insurance and add it to the loan amount. That's the first time I've ever received anything like that on any car loan I've taken out.
      • Re: (Score:3, Informative)

        by AndersOSU (873247)

        Probably because in the past you've promptly notified your lender that you have insurance.

        I got a similar note from my lender (a local credit union) on my car loan 4ish years ago. They're just covering their bases and making sure you have the insurance mandated in the loan agreement - if you don't they charge you out the ass for theirs.

      • Re: (Score:3, Informative)

        by ptbarnett (159784)

        I have an auto loan through the company and they just sent me a letter telling me that I better make sure I have them listed on my insurance as something or other or they would purchase their own insurance and add it to the loan amount.

        It's somewhere in the fine print of your loan agreement: as the secured creditor, the bank wants to be sure they are the first beneficiary of any payment from your insurance company if the vehicle is totaled.

        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.

        • Re: (Score:3, Interesting)

          by vlm (69642)

          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 mul

    • by radtea (464814) on Monday July 13, 2009 @02:40PM (#28680527)

      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: (Score:3, Interesting)

        by dkleinsc (563838)

        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 t

  • crazy? (Score:5, Insightful)

    by pak9rabid (1011935) on Monday July 13, 2009 @01:43PM (#28679481)
    Under normal circumstances I'd say this is completely wacked...but in legal land I guess it's just business as usual.
  • by MarkvW (1037596) on Monday July 13, 2009 @01:43PM (#28679487)

    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.

    • Per TFA, apparently not - it's the same corporate entities on both sides.
    • by Anonymusing (1450747) on Monday July 13, 2009 @01:48PM (#28679621)

      From the article: ...court documents clearly label "Wells Fargo Bank NA" as the plaintiff and "Wells Fargo Bank NA" as a defendant.

      Aren't they supposed to spontaneously self-destruct when this happens?

    • Re: (Score:3, Insightful)

      by wickerprints (1094741)
      It's even worse that that--taxpayer money was given to Wells Fargo as part of the bailout, so in essence they are paying lawyers on both sides with public money and wasting public money by litigating against itself. I don't think there's any more to the story, except perhaps that the sudden discovery that every employee in their legal department has simultaneously and collectively found a way to shove their cranium into their rectum should have been equally as newsworthy, if not publishable in a scientific
      • Re: (Score:3, Informative)

        by rhsanborn (773855)
        Not given, lent. Wells fargo will pay that money back in full. Other banks may not, but the taxpayer isn't paying wells fargo to do this any more than a mortgage holder is paying a person to buy a house. Quite the opposite in fact.
  • by Queltor (45517) on Monday July 13, 2009 @01:45PM (#28679507)

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

  • by Hotawa Hawk-eye (976755) on Monday July 13, 2009 @01:46PM (#28679553)
    why not increase the strangeness and have Wells Fargo hire Jack Thompson to represent one of the sides?

    ...

    ...

    Oh, right.
  • Too many lawyers (Score:2, Insightful)

    by Anonymous Coward

    I must come to the inescapable concludsion that there are too many lawyers in the U.S.

  • by travdaddy (527149) <travo@NospaM.linuxmail.org> on Monday July 13, 2009 @01:47PM (#28679583)
    I remember a similar case when Coke sued Coke Zero. It was all over TV a couple years ago.
  • by Greyfox (87712) on Monday July 13, 2009 @01:47PM (#28679587) Homepage Journal
    They could save a crap ton of money if they used the same guy to both prosecute and defend the case!
  • by Anonymous Coward

    Did anyone really think the banking industry was immune to one of prime forces of human nature?

    There just doesn't seem to be an end to the stupidity that plagues the money farm....

    To quote a simpler solution, "Jump You Fuckers!"

  • by XiX36 (715429) on Monday July 13, 2009 @01:47PM (#28679601)
    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. . .
    • Re: (Score:3, Interesting)

      by Landshark17 (807664)
      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.
    • by Culture20 (968837) on Monday July 13, 2009 @02:58PM (#28680745)
      Message to all other creditors of Wells Fargo: "Sorry, we owe this money to our #1 creditor, Wells Fargo, due to the outcome of this lawsuit. You can't have any."
  • by bidule (173941) on Monday July 13, 2009 @01:49PM (#28679635) Homepage

    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.

    • by jfengel (409917) on Monday July 13, 2009 @01:54PM (#28679725) Homepage Journal

      Thanks for RTFA. I find that most of the time stories about "How incredibly stupid is this?" are often leaving out some crucial fact.

  • by freejung (624389) * <webmaster@freenaturepictures.com> on Monday July 13, 2009 @01:55PM (#28679747) Homepage Journal
    The lawyers!

    It actually makes a perverse kind of sense though. Banks can effectively lend money to themselves, so they should be able to sue themselves too!

  • Eh (Score:5, Informative)

    by BSDevil (301159) on Monday July 13, 2009 @01:56PM (#28679755) Journal
    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 (Score:4, Informative)

      by castironpigeon (1056188) on Monday July 13, 2009 @02:13PM (#28680067)
      It's not Wells Fargo we ought to be upset at, it's the legal system that's so borked it requires a company to sue itself. Can we burn the law books yet and just govern ourselves by common sense?
      • Re: (Score:3, Insightful)

        by vlm (69642)

        It's not Wells Fargo we ought to be upset at, it's the legal system that's so borked it requires a company to sue itself. Can we burn the law books yet and just govern ourselves by common sense?

        Not a system problem at all.

        How can all these "computer people" not know the phrase "garbage in, garbage out".

        One bank on both sides of a 80/20 is garbage.

        Garbage in, garbage out, therefore the cleanup is inherently going to be crazy.

    • Re: (Score:3, Insightful)

      by residieu (577863)
      Except the defense is DISPUTING the claims of the plaintiff. If it was just for bookkeeping purposes, wouldn't the defense nod their heads, and rubber stamp a settlement?
      • Re:Eh (Score:5, Interesting)

        by Todd Knarr (15451) on Monday July 13, 2009 @02:31PM (#28680383) Homepage

        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.

    • Re: (Score:3, Insightful)

      by Bourbonium (454366)

      As is becoming more common with foreclosure cases these days, a homeowner can fight the action if they can have the bank prove that they hold the note and all the paperwork on the property. In many, many cases, the bank may well have bundled the mortgage into a security with dozens or even hundreds of other mortgages and sold it to another entity. That entity may well have sold it in a different bundled security to another bank and so on and on and on. I do recall reading about a case in, yes, Florida, w

  • by bperkins (12056) on Monday July 13, 2009 @01:58PM (#28679813) Homepage Journal
    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.
  • Get in line (Score:4, Insightful)

    by Jeremy Erwin (2054) on Monday July 13, 2009 @01:59PM (#28679833) Journal

    Seems like a clear case of "heads, we win, tails, you lose". This lawsuit ensures that one part of wells fargo gets the proceeds of any auction or resale, and what's left over after satisfying the original note (yeah right)/ will still go to the other part of wells fargo. Maybe the 80% note is subordinate to the 20% note?

  • Crazy like a fox (Score:5, Interesting)

    by russotto (537200) on Monday July 13, 2009 @02:01PM (#28679861) Journal

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

    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...

  • Advice from the past (Score:3, Interesting)

    by ellbee (93668) on Monday July 13, 2009 @02:40PM (#28680521)

    "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.

  • by jameskojiro (705701) on Monday July 13, 2009 @03:28PM (#28681171) Journal

    From port 127.0.0.1 !!!

    OMG, Ponies!

Murphy's Law, that brash proletarian restatement of Godel's Theorem. -- Thomas Pynchon, "Gravity's Rainbow"

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