Have the Banks Gone Crazy? Wells Fargo Sues Itself
July 2, 2009
By Angie Moreschi:
We’ve apparently reached the perfect storm for complete and utter idiocy by some banks trying to foreclose on homes. Wells Fargo is now suing itself in order to foreclose on a property in Tampa, FL. Sounds crazy, but it’s true. Click on the video above to hear the story and read more about this story below.
Dow Jones Newswire and FOX Business News Commentator Al Lewis picked up on our story and also had a little fun with it. Click here to read his report.
The Foreclosure Process Run Amok
By Angie Moreschi:
Sarasota Foreclosure Attorney, Dan McKillop, who represents the homeowner, recently brought the case to our attention. “Wells Fargo sued itself, said McKillop. “Then, Wells Fargo went out and hired a defense attorney to go ahead and defend against themselves.”
McKillop says this is the 5th or 6th time he’s seen a mortgage company do this. In addition to Wells Fargo, he’s now handling another case where SunTrust Bank is suing itself.
It happens when the lender holds both the first and second mortgage. Essentially, he says it’s a way for the lender to avoid paperwork, push through the foreclosure and sell the property faster. Or he says, perhaps they don’t even realize what they’re doing, which is even more ridiculous.
“The banks don’t take the time to properly file complaints. The same way they didn’t take the time to look at any of the homeowners info. The same way they didn’t take the time to properly assign the notes and mortgages. So, we’re basically in that process now, but it’s the plaintiff’s attorneys who are trying to push through these foreclosures as fast as possible.”
“You can’t help but laugh,” McKillop added. “At the very least, you understand nobody else knows what they’re doing.”
We contacted Wells Fargo to get a comment about this seemingly unusual practice. The company’s Communications Manager, Kevin Waetke, responded in an email saying he was “not familiar with this practice.” He added, “Are you inquiring about a specific case, or simply a policy perspective from a servicer? In that regard, we have nothing to contribute…”
We are following up with Wells Fargo and will update you if they are able to provide a comment with more explanation.
UPDATE: 7/3/09, Wells Fargo Communications Manager Kevin Waetke provided this statement to further explain why the company sues itself in some foreclosure cases:
“Due to state foreclosure laws, lenders are obligated to name and notify subordinate lien holders — as well as all parties with an interest in a property — as a property moves through the foreclosure process. The primary reason is to clear title and ownership interest in a property to prepare it for sale.”
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 says it’s frustrating to see companies more interested in accelerating the sale of foreclosed properties rather than working with homeowners to stay in their homes.
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