Tag Archives: Wells Fargo Bank NA

WELLS FARGO HIT WITH PROPOSED CLASS ACTION IN FLORIDA … UPDATE!

(BREAKING NEWS – OP-ED) — The information provided here is just coming in off the wires (Law360.com hat tip).  This information is provided for educational purposes only and does not constitute the rendering of legal advice. 

UPDATE … Here are the federal complaints and exhibits (hat tip to Dr. Klaus)!:

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Wells Fargo Bank NA has done it again!  A Florida couple has filed a proposed class action lawsuit against the lender, claiming (on behalf of all other interested parties) that the bank altered their second mortgage loan, thus screwing up their chain of title, accusing the bank of impairing their property’s vendibility. Philip and Ingrid Tippett filed the action yesterday in the Middle District of Florida (Case No. 5:20-cv-00342) through their law firm of Kozyak Tropin.  The first judge assigned to the case (Moody) filed an Order of Recusal in the matter and the case was reassigned to Hon. Brian J. Davis, an Obama appointee in the Jacksonville Division.

The complaint alleges that Wells Fargo Bank issued thousands of second mortgage loans (HELOCs) and after discovering that it had made a critical error in failing to set the second mortgages to terminate after the final maturity date, the bank went in and fraudulently altered the maturity dates on the loans without informing its customers in order to avoid having all those loans left unsecured because of the errors committed in the original loans.  This author can only imagine what Wells Fargo is going to file as a response and how it’s going to answer discovery.

Here’s the thing … the customers signed a second mortgage loan contract with Wells Fargo Bank NA and could have ended up with an unsecured loan because of the screw-up made (not by the borrowers) by the bank.  The bigger issue is … if it’s found that Wells actually altered the documents AFTER they were signed, a judge could decide to void all of the loans, as the customers agreed to one thing and Wells Fargo went in and allegedly altered the documents to say quite another thing.

We’re talking thousands of second mortgage (HELOC, Home Equity Line of Credit) loans here!   Mind you, the ink is still fresh on this filing and Wells Fargo has not answered the complaint yet.

It should be noted here that altering public documents and/or recording false and misrepresentative statements into the public record in Florida is punishable as a third-degree felony in Florida under Florida Criminal Code § 817.535.  Please contact the author of this post at cloudedtitles@gmail.com if upon checking your second mortgage HELOC loan (doesn’t matter which State you are in) you have discovered alterations in your second mortgage recorded documents from what you were given at closing.  The author would be interested in examining your documents and you could possibly be considered as a part of the class action if you fit into the parameters of the class. Since we now have the complaint with the exhibits, the author suggests using the exhibits as a comparison as to what you might see in your own documents.

This mega-bank just can’t seem to keep itself on the straight and narrow despite the rash of allegations brought against it by whistleblowers, accusing the bank of ordering its customer service agents to open fraudulent checking and savings accounts, which opened up a whole Pandora’s Box of issues that ended up being aired in front of Congressional committees. The author wonders about whose “heads are going to roll” for this mess, who’s going to take the real responsibility for ordering the alterations, who’s going to get criminally prosecuted for altering land records and how the bank is going to explain this boner to its stockholders.

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INVESTOR ALERT: ACQUIRING MORTGAGED PROPERTIES CAN RACK UP UNNECESSARY LEGAL BILLS

(OP-ED) — The following is an opinion of the author only and the content offered herein is for your educational benefit.  Enjoy! 

One of the avenues investors like to travel upon is that of acquiring homeowners association liens.  Such was the case in Texas with Kingman Holdings LLC.  You can read the case here:

wells fargo bank na v kingman holdings llc, tex app (5th) cir no 05-17-01240-cv (jan 17, 2019)

The one thing I didn’t notice is all of the “assignments” that were talked about in the suit.  None of them were ever challenged.  And this is a MERS-originated Deed of Trust, so you know it was securitized.   As the case states, Lehman’s Asset Backed Securities Mortgage Loan Trust 2007-1 was involved and it is highly likely that there are multiple issues regarding the actual negotiation of the note and related paperwork to the custodian of the trust at the proper time stipulated by the 424(b)(5) Prospectus for that REMIC trust.  What this case argued was lien superiority and Wells Fargo won, despite the lack of challenge to the assignments.  I wonder what the outcome would be if the false and misrepresentative statements contained in the pleadings in the lawsuit, which ties the false statements made in the pleadings to the documents in the land records, thus opening the door to further scrutiny (albeit the other side might scream that we’re reaching; parol evidence).

No pain … no gain.  But investors have to be careful when it comes to buying HOA-related properties.  This is why I like tax deeds.  The county in fact DOES have first lien priority, whereas HOA’s do not.  In fact, reading into this case, nothing in the HOA paperwork showed its lien was superior, but money was spent litigating the case anyway.  Learn from other’s futile mistakes.

You can look at this case and say, “The banks always win!”  however, understand who the appellant is here … the bank.  It got ruled against in the lower court!

Sadly, I’ve come to understand that most HOAs only notify the actual owner of the property and NOT the lenders that might have a mortgage on that property.  This puts investors in a vary “gray area” when it comes to acquiring property that has an existing mortgage, thinking that nothing will come of it.  So … caveat emptor, especially if you’re investor who didn’t plan on spending extra cash in litigation.

NEW REVISED COTA CHECKLIST

AS AN ADDED BENEFIT to this story … please download the PDF of our new COTA Checklist for 2019 here:

2019 cota checklist

Having tools at the ready when you’re doing property searches isn’t a bad thing, especially when your own property might be in jeopardy.

GOVERNMENT SHUTDOWN UPDATE:

On another note … while not related to chain of title issues … the Air Traffic Controllers Union and a host of its membership have filed suit against the government, citing air security risk due to the government shutdown … read the lawsuit here:

patca et al v us, us d.c. no 1-19-cv-00062 (jan 11, 2019)

This lawsuit may not move too fast given what we reported on this blog yesterday about the courts’ running out of funds tomorrow.   If air traffic controllers have to suffer, what do you think airline passengers might face in the near future?   Don’t you think shit rolls downhill?   Make your travel plans accordingly as flying might not be the best option right now.

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