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."

Re:Not only act of idiocy

[scubamage]

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! :)

Re:Suing yourself is collusive litigation.

[Anonymusing]

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:Not only act of idiocy

[AndersOSU]

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:Florida requires it?!

[jfengel]

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

Re:Coke did this

[deanoaz]

Except that was a humorous Coke Zero ad campaign about how utterly stupid it would be if Coke sued itself. Wells Fargo is actually doing it.

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:Not only act of idiocy

[autocracy]

That separation is government mandated anti-monopoly work stemming way back from Ma Bell time. The lender thing might be related to SEC rules. The lawsuit is just retarded. I hope the judge fines the plaintiff for wasting his time...

Re:Eh

[castironpigeon]

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:Coke did this

[Anonymous Coward]

Except that was a humorous Coke Zero ad campaign about how utterly stupid it would be if Coke sued itself. Wells Fargo is actually doing it.

You know, the joke was funny enough without you having to explain it.

Some of us don't have a TV you insensitive clod!

Re:Not only act of idiocy

[ptbarnett]

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:Suing yourself is collusive litigation.

[rhsanborn]

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.

Re:Not only act of idiocy

[NickW1234]

You might be confusing Stargate with 2001 a little bit.

Re:In all actual seriousness...

[harpune]

You can at least remove yourself from the whims of some of these corporations. Find yourself a local credit union [creditunion.coop], and put your money there. They're not perfect, and they don't have all the fancy 'Get an iPod when you open a credit line' deals, but a stable place to keep your money, that is more or less customer-owned, should outweigh those gimmicks. I haven't looked back since I opened an account at a CU after WaMu went down.

Re:You can Do that?

[Dragonslicer]

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:You can Do that?

[goaliemn]

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:Not only act of idiocy

[Turken]

Well, the REALLY smart thing to do is live with a cheap old car as long as you possibly can while making payments into your own savings account towards a new car. Then buy the new car with cash and forget the bank financing entirely. Once the purchase is done, continue making payment towards the next new car. By deferring the first new car a couple years to begin with, you can put yourself in a positive cycle that will yield thousands in savings for years to come.

Re:Not only act of idiocy

[pwizard2]

In the end, I had to threaten Wells Fargo with the Better Business Bureau in order to get them to remove the charges for insurance that I refused to pay for (since I had already been insured and notified them multiple times of it).

While it sounds intimidating, the Better Business Bureau is not a government agency and is therefore powerless to make a company do the right thing. (If you want to play that angle, just hope the guy you're talking to doesn't know that) If you really want to put the fear of God into a business when they try to rip you off, I heard you should threaten to talk to your state Attorney General instead.

Re:Florida requires it?!

[diamondsw]

And required by Florida law. If they did not, the foreclosure would be vacated.

As usual, it all comes back to Florida.

Re:In all actual seriousness...

[crazyjimmy]

My credit union is part of the Co-Op Network. As such, I have tons and tons of free ATMs scattered throughout the valley. It's a good deal.

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.

Re:Not only act of idiocy

[AK Marc]

Wells Fargo is required by law to sue the other leinholders in order to clear the title. There is no way, other than court order (which requires a lawsuit) to get a name removed for a clear title. Even when they are the same entity.

Re:You can Do that?

[Anonymous Coward]

Wells Fargo received $25 billion in TARP funds.