Academic

?Wells Fargo Sues Wells Fargo, Wells Fargo Denies Allegations?

By Kim Krawiec

Via Calculated Risk, who gets credit for the excellent headline.  FOX Business reports:

Yet I could not resist asking Wells Fargo Bank NA why it filed a civil complaint against itself in a mortgage foreclosure case in Hillsborough County, Fla.

"Due to state foreclosure laws, lenders are obligated to name and notify subordinate lien holders," said Wells Fargo spokesman Kevin Waetke. . . .

In this particular case, Wells Fargo holds the first and second mortgages on a condominium, according to Sarasota, Fla., attorney Dan McKillop, who represents the condo owner.

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

"The primary reason is to clear title and ownership interest in a property to prepare it for sale," Waetke said in an email exchange. "So it really is not Wells Fargo vs. Wells Fargo." . . .

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

Wells Fargo hired Florida Default Law Group., P.L., of Tampa, Fla., to file the lawsuit against itself.

And then Wells Fargo hired another Tampa law firm -- Kass, Shuler, Solomon, Spector, Foyle & Singer P.A. -- to defend itself against its own lawsuit, according to court documents.

Wells Fargo's defense lawyers even filed an answer to their client's own complaint.

"Defendant admits that it is the owner and holder of a mortgage encumbering the subject real property," the answer reads. "All other allegations of the complaint are denied."

According to the article, such cases of large banks suing themselves for foreclosure have become more common, at least in Florida, thanks to the 80/20 loans popular during the final years of the housing boom.  Can someone please steer FOX away from this story before they manage to effect a change in foreclosure law or practice?  Goodness knows lawyers need the business in this environment.  

Full post as published by The Faculty Lounge on July 14, 2009 (boomark / email).