WEDNESDAY, OCTOBER 27, 2010

BY NAKED CAPITALISM

Wells Fargo Finds Foreclosure “Lapses” in 55,000 Current Cases
We criticized Wells for falsely claiming in briefings in Washington DC that it did not have robo signers when there were already depositions in the public domain to the contrary. In these same presentations, Wells claimed to be a good operator, free of the sort of lapses at other servicers that were generating bad press. Wells was shown to be a liar on the first count, and amusingly in a prominent venue. In a weird bit of cosmic justice, the very next day, the Financial Times ran a first page story on the Wells use of robo signers. The second shoe dropping, the general lapses in Wells’ foreclosures, has taken more time to come to light, and this time, they are by the bank’s own admission. However, as has proven to be the pattern with all the major parties in the foreclosure process, Wells is claiming that needing to file additional documentation in 55,000 cases is no big deal and of course that nothing really is amiss. It will be interesting to see what local courts make of this. If any of these new filings contradict previously provided evidence (and by definition, a replacement of a robo signed affidavit is an admission the earlier submission was improper, hence a fraud on the court; the new affidavits may also change substantive information), they may encounter resistance from judges. My guess is that while few judges would dismiss cases with prejudice (meaning the parties to the case could not try to foreclose again), Wells could in some situations be required to file a new foreclosure action from scratch. From Bloomberg: Wells Fargo & Co., conceding that some foreclosure affidavits “did not strictly adhere to the required procedures,” said it will file supplemental statements to courts in about 55,000 proceedings….. The bank will begin filings in 23 states immediately and aims to complete them by mid-November, subject to local laws, according to the statement. “The issues the company has identified do not relate in any way to the quality of the customer and loan data,” the San Francisco-based lender said in the statement. “Nor does the company believe that any of these instances led to foreclosures which should not have otherwise occurred.”….

“The company has identified instances where a final step in its processes relating to the execution of the foreclosure affidavits (including a final review of the affidavit, as well as some aspects of the notarization process) did not strictly adhere to the required procedures,” it said in the statement. Wells Fargo has assigned 160 employees in four offices to be part of the review, said Teri Schrettenbrunner, a spokeswoman for the company, in a phone intervie

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