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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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  • 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.
  • 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.

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

    Too big to not fail?

  • Too many lawyers (Score:2, Insightful)

    by Anonymous Coward on Monday July 13, 2009 @01:47PM (#28679577)

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

  • 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 wickerprints (1094741) on Monday July 13, 2009 @01:55PM (#28679741)
    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 journal.
  • by gd2shoe (747932) on Monday July 13, 2009 @01:55PM (#28679745) Journal
    I'm surprised the Judge hasn't called in both attorneys and chewed them out. They clearly deserve it.
  • 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!

  • 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?

  • Re:Coke did this (Score:5, Insightful)

    by SomeJoel (1061138) on Monday July 13, 2009 @02:02PM (#28679885)
    You know, the joke was funny enough without you having to explain it.
  • Re:Coke did this (Score:1, Insightful)

    by Todd Fisher (680265) on Monday July 13, 2009 @02:04PM (#28679915) Homepage
    Woosh!
  • by Anonymous Coward on Monday July 13, 2009 @02:06PM (#28679943)

    Even with that crucial fact it's still incredibly stupid.

  • by sargon666777 (555498) on Monday July 13, 2009 @02:06PM (#28679957) Homepage
    Thats true, but they should have to pay court costs and so forth which should help absorb some of the impact to the tax payers. The really amazing part is the two law firms that are going to make a decent amount suing each other while representing the same client.
  • by wizardforce (1005805) on Monday July 13, 2009 @02:09PM (#28680007) Journal

    How is this a worthless article if it points out the stupidity of certain laws?

  • Re:Eh (Score:3, Insightful)

    by residieu (577863) on Monday July 13, 2009 @02:13PM (#28680077)
    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?
  • by amicusNYCL (1538833) on Monday July 13, 2009 @02:16PM (#28680117)

    Regardless of facts being left out, the company is still suing itself, which is demonstrably stupid.

  • by AndersOSU (873247) on Monday July 13, 2009 @02:20PM (#28680197)

    even if you understand that, the fact that this nonsense ends up in court means there's no one in a management position prepared to actually make decisions.

    Ok, different divisions have different objectives, but it's the job of the CEO to manage the company as a whole. This should all be resolved in conference room 101 internally

  • by Midnight Thunder (17205) on Monday July 13, 2009 @02:27PM (#28680327) Homepage Journal

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

    You are talking about the legal system and this is known to stand outside the normal laws of physics. ;)

  • by mr_mischief (456295) on Monday July 13, 2009 @02:35PM (#28680435) Journal

    So we can bail out Wells Fargo for unforeseen expenses they incurred?

  • 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.

  • by cob666 (656740) on Monday July 13, 2009 @02:45PM (#28680605) Homepage

    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 =(

    You might be confusing RL with Stargate a little bit.

    You might be confusing Stargate with 2001: A Space Odyssey a little bit

  • 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 BradleyAndersen (1195415) on Monday July 13, 2009 @02:59PM (#28680749)
    While it may seem stupid (and I agree with you, it does), it is apparently necessary for the particular suit to go forward, as GGP says. Usually, I would say this means the law needs to be changed; however, this law actually makes sense. This just happens to be a really strange application of that law.
  • by Tanktalus (794810) on Monday July 13, 2009 @03:09PM (#28680903) Journal

    Because the people doing real work, who knew what they were doing, were to important to be promoted into doing other things.

  • by Anonymous Coward on Monday July 13, 2009 @03:18PM (#28681043)

    Wow. So you speculated on bubble properties, decided to become a deadbeat, and you bitch that YOUR tax money is being misappropriated??

    It is the tax money of RESPONSIBLE homeowners and renters that is going to subsidize speculating bubble inflators like YOU.

    I hope you get cancer and your wife fucks your brother after the funeral.

  • Re:Coke did this (Score:3, Insightful)

    by aj50 (789101) on Monday July 13, 2009 @03:18PM (#28681047)

    No it wasn't, I didn't understand it at all.

    Then again, I wouldn't have seen the explanation if it wasn't for your comment saying how redundant it was.

    So thank you.

  • by lgw (121541) on Monday July 13, 2009 @03:45PM (#28681423) Journal

    Clearly you don't understand banking. Wells Fargo didn't waste any of their smart bankers on operations or procedures - how silly would that be? They directed their brainpower towards bribing the government for handouts! Has they been smart and efficient, they just would have gotten smaller handouts. Working hard to make your business a success is the sort of thing a free market rewards, not the sort of thing a corrupt government rewards. Who are you to criticise - how many billions of taxpayer dollars did you get, hmmm?

  • by Critical Facilities (850111) * on Monday July 13, 2009 @04:06PM (#28681767) Homepage
    Something's not adding up in your story. First of all, (and I'll probably get modded into oblivion for this) it sounds like you bought a house you either couldn't afford or were unwilling to pay for. You calmly claim that you "fell behind" 3 months, were allowed to enter an agreement with the bank to fix that problem, and still complain that in 2 years they wanted their money with interest....the nerve!! Let's put the shoe on the other foot. If your employer stopped paying your check for 3 months, wouldn't you want your money back ASAP and with some interest?

    I also do not understand how you were able to repay the 3 month's worth of mortgage owed, but were unable to come up with the interest on the delinquent charges. How is it that in 2 years and 3 months, you couldn't come up with the interest on the 3 month's payments?

    Then, to top it off, you claim that your home was foreclosed on, 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. I realize that we're in a "down market" as they call it, but trying to tell me that your home went back on the market for 1/30 of its original price is a little much.
  • by vlm (69642) on Monday July 13, 2009 @04:21PM (#28681973)

    Regardless of facts being left out, the company is still suing itself, which is demonstrably stupid.

    No no no. The demonstrably stupid part is not suing itself, but the same org taking both sides of the 80/20.

    The whole point of an 80/20 is the bank paying for the 80 thinks the victim is too much of a credit risk for a 95/5 or a 100/0 or whatever, but maybe they can get a 20 somewhere else, from some loan shark or something.

    Basically some fool paid all the fees for two mortgages at the same place, an 80 and a 20, when they should have just paid one fee for a 100/0. Its really more of a fraud case than anything else.

    The application of the law seems weird because its a being applied to a bizarre situation.

    Admittedly my last home purchase was before the housing bubble, with at least 20% down, a long time ago. Maybe in the bubble madness this is just how things were done.

  • Re:Eh (Score:3, Insightful)

    by vlm (69642) on Monday July 13, 2009 @04:27PM (#28682075)

    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.

  • by R3d M3rcury (871886) on Monday July 13, 2009 @05:11PM (#28682681) Journal

    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.

  • by Artifakt (700173) on Monday July 13, 2009 @05:51PM (#28683239)

    I could see Wells Fargo being forced into complying with the State of Florida's legal requirement. I'm sure this explanation appeals to some people who want to believe that it's always governments and not corporations that act stupid and crazy. But why have your defense deny the other allegations? Why not file a motion, have the other department agree with all points and settle out of court, so the company as a whole can get on with what it needs to do. Whatever law Wells Fargo blames this on, there certainly isn't a law that requires litigants to disagree with claims and insist on going through the entire trial process. I will flat guarantee you no state has a law saying litigants can't settle out of court. Still, it makes a superficially good story when you are caught being idiots.

  • Re:Eh (Score:3, Insightful)

    by Bourbonium (454366) on Monday July 13, 2009 @07:19PM (#28684183)

    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, where a homeowner has actually forced the bank to re-negotiate her mortgage because they have not been able to prove that they hold her mortgage! They sold it off years ago in such a deal, but now cannot trace the labyrinth of transactions to find the original promissory note, because it has been sold and re-sold multiple times since then.

  • by EMeta (860558) on Monday July 13, 2009 @08:46PM (#28684959)
    Except you forget: ice on sidewalks means someone is going to slip and fall. And then sue them. Which apparently they don't have enough of these days.

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