Wells Fargo Bank Sues Itself

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Sam2
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Wells Fargo Bank Sues Itself

Post by Sam2 » Mon Jul 13, 2009 3:05 pm


chaz
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Post by chaz » Mon Jul 13, 2009 3:21 pm

Wells Fargo says it was following state law. But:

"Rather than suing itself -- a stunt that was never even attempted on the MTV show "Jackass" -- wouldn't it be easier for Wells Fargo to release one of the liens to itself? Or pursue some other internal accounting strategy rather than tie up the court with nonsense?

"This is just folks cranking out paperwork without conscious thought," said Anthony Sabino, a law professor at St. John's School of Law in New York City."
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page

m_j_paquette
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Post by m_j_paquette » Mon Jul 13, 2009 11:50 pm

chaz wrote:"This is just folks cranking out paperwork without conscious thought," said Anthony Sabino, a law professor at St. John's School of Law in New York City."
It's not even unique. Wells Fargo has some internal... difficulties. I'm involved in a dispute between Wells Fargo Bank NA and Wells Fargo Insurance Services, both divisions of Wells Fargo & Company. It's not easy to find law firms without conflicts of interest to carry out this sort of litigation.

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dpbsmith
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Post by dpbsmith » Tue Jul 14, 2009 7:31 am

It's astonishing, isn't it? I was naïve to wonder why banks are foreclosing rather than renegotiating mortgages when renegotiating them is such an obvious win/win.

But if nobody at a bank has the basic commonsense, initiative, and empowerment not to sue itself, then when it comes to mindless bureaucracy private enterprise has shown itself to be every bit a match for government.

Scariest part is the lawyer quoted as saying "Four or five years ago, you would have never seen this. Now, it's very common."

The mind simply boggles at the thought of something like this going to court. Does the judge at least say, "Mr. Wells, Mr. Fargo, you're not wasting the court's time with this nonsense, you go out in that corridor and be back with a settlement in five minutes?"

If Wells Fargo Accounts Payable were to say "This legal bill for suing ourselves is either a joke or a fraud and we're not paying it," that would be a legal battle worth fighting.

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Post by Ping Pong » Tue Jul 14, 2009 8:40 am

Loans are usually securitized these days. So it's basically one group of MBS holders sueing the other group. Wells can't negotiate the secondary lien with itself because it doesn't own it. The risks of one or both of the loans have probably been sold to a third party. If they were to negotiate with themselves, they would run the risk of getting sued by the MBS holders for not representing the rights of the parties who suffer the losses.

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Mel Lindauer
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Post by Mel Lindauer » Tue Jul 14, 2009 4:15 pm

Well, I guess their legal department will claim it as a victory, no matter which of their sides eventually wins! :D
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chaz
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Post by chaz » Tue Jul 14, 2009 4:41 pm

Mel Lindauer wrote:Well, I guess their legal department will claim it as a victory, no matter which of their sides eventually wins! :D
OTOH, Wells Fargo has to pay two law firms. A victory?
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Post by junior » Tue Jul 14, 2009 4:41 pm

Ping Pong wrote:Loans are usually securitized these days. So it's basically one group of MBS holders sueing the other group. Wells can't negotiate the secondary lien with itself because it doesn't own it. The risks of one or both of the loans have probably been sold to a third party. If they were to negotiate with themselves, they would run the risk of getting sued by the MBS holders for not representing the rights of the parties who suffer the losses.
Nothing in the article indicates its securitized. If it was, you'd have to think there would be a conflict of interest if Wells is representing both the primary and subordinate lien holders and suing one on behalf of the other...

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baw703916
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Post by baw703916 » Tue Jul 14, 2009 4:59 pm

Mel Lindauer wrote:Well, I guess their legal department will claim it as a victory, no matter which of their sides eventually wins! :D
The losing side could appeal on the grounds that the lawyers had a conflict of interest and therefore did not provide adequate legal representation.

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Post by chaz » Tue Jul 14, 2009 5:03 pm

baw703916 wrote:
Mel Lindauer wrote:Well, I guess their legal department will claim it as a victory, no matter which of their sides eventually wins! :D
The losing side could appeal on the grounds that the lawyers had a conflict of interest and therefore did not provide adequate legal representation.

Brad
Wells Fargo needed two law firms to avoid a conflict of interest.
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Post by sommerfeld » Tue Jul 14, 2009 6:18 pm

chaz wrote:
Mel Lindauer wrote:Well, I guess their legal department will claim it as a victory, no matter which of their sides eventually wins! :D
OTOH, Wells Fargo has to pay two law firms. A victory?
For the law firms, yes.

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