Wells Fargo sues itself over condo mortgage

An anonymous reader posted this link in the weekends free-for-all post: Wells Fargo bank is suing itself in Florida court over a mortgage foreclosure case.

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.”

This is even dumber than the lending practices that led to this foreclosure mess, yet this is what the court record says. I learned about this from “The Consumer Warning Network” Web site, which posted an article by Angie Moreschi titled, “Have The Banks Gone Crazy?”

“We’ve apparently reached the perfect storm for complete and utter idiocy by some banks trying to foreclose on homes,” Moreschi wrote.

McKillop, the condo owner’s attorney, told me he thinks Wells Fargo doesn’t know what it’s doing, and that its lawyers figure it is all billable hours to them.

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No Longer Looking

Mr. Reasonable, I haven't borrowed a cent in years. Somehow, I manage.

Mr. Reasonable

No Longer Looking: I have friends that went through bankruptcy 5 years ago. There are a lot of negatives, one being that borrowing money becomes much more difficult and expensive for a long time. People would be well advised to steer clear if possible.

No Longer Looking

JD,

For those who suddenly lost jobs, and have no other assets, I can't imagine bankruptcy will bother them if they are hundreds of thousands of dollars underwater.

JD

realpaul: In non-recourse states you can walk away from a mortgage without declaring bankruptcy, but here in Vancouver they'll come after you for the difference between what you owe on the house and it's current value.

Ironically non-recourse loans did a great job of preventing banks from over-loaning on speculative real estate investments until they got too smart for their own good and invented the slice and dice reselling of debt. The story of the bank that sues itself just goes to show the general level of expertise at work in these financial institutions.

I have a feeling that people who dream about a 'return to normalcy' based on the lunacy of the bubble years are going to be disappointed for a loooong time.

realpaul

Walking away from negative equity is just a numbers game.

"When negative equity rose to $50,000, 7% of those who consider strategic defaults to be immoral said they'd walk away. At $100,000 negative equity, 22% would do so. At negative $200,000, 37% of those with moral objections would nonetheless default, and at $300,000, 38% said they would.

Among those who had no moral reservations, the percentages were much higher. At $50,000 negative equity, 20% said they'd walk away. At negative $100,000, 41% would do so, as would 59% at negative $200,000 and 63% at $300,000.

The researchers found that age, tenure of homeownership, the frequency of foreclosures in a person's ZIP Code and even politics influence an owner's willingness to bail out of a mortgage. Owners under age 35 are less likely to have moral problems with strategic defaults,"

http://www.latimes.com/classified/realestate/news

realpaul

Stunning news of mass robot unemployment !!!! Tha future is now. Humans must die!!!!

http://www.nytimes.com/2009/07/13/technology/13ro

stats

: Looks like sales have plateaued and prices can't be far behind

http://agentwill.com/weekly-stats/

Anon

Good for lawyers though, they always make money, no matter what!

YLTNboomerang

Just got back from Fort Lauderdale where the water taxi driver stated the price of the luxury waterfront condo (it actually was pretty damn fancy and very waterfront in the most exclusive area of town) at $340K for a 700sqft place to which everyone on the boat balked at such crazy prices. I'd much rather pay this price down there than in Vancouver any day.

Speaking of Vancouver, I've been out of touch for the past couple weeks and have lost my access to the MLS site, does anyone have any charts depicting sales and average prices to confirm that the spring bounce is over and that prices are declining again? I'd really take comfort in seeing such a chart.