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.
Being almost entirely unfamiliar with this area of practice, I have no idea what passes for normal. But I do have to wonder whether there isn't any problem, under Rule 11 for instance, with Wells Fargo as a defendant denying the allegations that Wells Fargo as the plaintiff makes in its complaint? And how do they manage any privilege issues? Just thinking about it gives me a headache!
Me too, Eric, me too. Look on the bright side: we may be at the tipping point where banker jokes outnumber lawyer jokes.