2I. BACKGROUNDAnimating both cases is Plaintiffs’ theory that ProsperityMortgage Company (Prosperity), the product of a joint venturebetween Wells Fargo Bank, N.A. (Wells Fargo) and Long & FosterReal Estate, Inc. (Long & Foster), operated not as anindependent mortgage lender but rather as a mere frontorganization formed to circumvent legislation designed toprevent market-distorting business practices within the realestate settlement services industry. Thus, with only minorexceptions, Plaintiffs’ success or failure in both cases willturn on the independence and legitimacy of Prosperity’soperations.Prosperity, as it exists today, was formed in 1993 in ajoint venture between Wells Fargo, then known as NorwestMortgage, Inc., and Walker Jackson, then known as ProsperityMortgage Corporation (PMC).
Walker Jackson is a wholly ownedsubsidiary of The Long & Foster Companies and is an affiliate ofDefendant Long & Foster. In the early 1990s, PMC was strugglingas a mortgage lender. The Long & Foster Companies, which owned
PMC, as it existed prior to 1993, is not to be confused withDefendant Prosperity. Despite their identical names, the twocompanies are separate corporate entities and are related onlyinsofar as the latter (Defendant Prosperity) is the product ofthe former’s (PMC’s) 1993 joint venture with Wells Fargo. Forthe sake of simplicity, the Court will refer to all parties bytheir current names. Thus, except where necessary, PMC andWalker Jackson will be referred to as Long & Foster, whileNorwest Mortgage will be referred to as Wells Fargo.
Case 1:07-cv-03442-WMN Document 253 Filed 05/03/11 Page 2 of 81