Wells Fargo Menu of Mayhem

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In one of my cases where we are seeking punitive damages against Wells Fargo I had occasion to create a list of times where Wells Fargo has been in the news for behavior that the Courts described as “clandestine” or “illegal” or “arrogant” or “shameful” or “shocking.” It seems that even $3 million verdicts or orders against Wells Fargo are just a cost of doing business. It apparently remains in their interest to pursue illegal foreclosures, luring homeowners into default, and misusing information that they never should have had in the first place because they were neither owner nor servicer of the loan.

Most of these are articles posted by livinglies when the judge’s order was received. I’d like to see more. And remember, if you have settled with Wells Fargo under seal of confidentiality, make sure you are not violating the terms of your settlement agreement before you send us anything here.

I invite people to send additional records of where a Court has ruled against Wells Fargo for misbehavior concerning loan origination, collections, enforcement, modification and foreclosure. Send your entries to neilfgarfield@hotmail.com. In the subject matter line please write “Wells Fargo Order.”

Here is my list so far:

Wells Fargo Skewered by Federal Judge For Forgery as a Pattern of Conduct

Wells Fargo Punitive Damages Affirmed in Lousiana: $3.1 Million

· Wells Fargo Is Sanctioned For Role in Mortgage…

http://www.wsj.com/articles/SB120952684628255551

Apr 29, 2008 · A judge has penalized Wells Fargo & Co., … imposing a $250,000 sanction against it. … a Massachusetts federal bankruptcy judge, …

Wisconsin BKR Judge Orders Wells Fargo to Disgorge Payments It Received

Fonteno v. Wells Fargo Bank, N.A. California Foreclosure Sale Reversed

Wells Fargo Manual Serves as Basis for Deeper Discovery

Judge Zloch Deals Blow to Wells Fargo and Ocwen on Trial by Jury

Quite a Stew: Wells Fargo Pressure Cooker for Sales and Fabricated Documents

Damages Rising: Wrongful Foreclosure Costs Wells Fargo $3.2 Million

The Rush to Foreclosure: Wells Fargo Loses the Argument on Trial Modifications

Mortgage Lenders Network and Wells Fargo Battled over Servicer Advances

Wells Fargo Attempting to “offer” Modifications But Refusing to Put it in Writing

Federal Bankruptcy Judge Explains Wells Fargo Servicer Advances

Federal Judge Slams Wells Fargo for Violation of Debt Collector’s Act in Florida

Wells Fargo: Insured Mortgages Still Being Foreclosed After Death Benefit is Paid to Bank

LAWYER BONANZA!: Wells Fargo Foreclosing on Homeowner Who Made all Payments and Paid Extra

Wells Fargo Wrongful Foreclosure Kills Elderly Homeowner?

FDCPA Strikes Again: West Virginia Slams Wells Fargo

Fagan: Defeats Wells Fargo on Judicial Notice

Wells Fargo Sued For Intentionally Underwriting and Submitting Bad Mortgages on Insurance Claims

Wells Fargo to Pay up to $50,000 per person in bias case against blacks, Hispanics

Wells Fargo Compounds Misbehavior with Retaliation

Lawyers Take Note: Wells Fargo Slammed With $3.1 Million Punitive Damages on One Wrongful Foreclosure

Fed Orders Ally, BOA, Citi, JPM, Wells Fargo to Pay $766.5 Million in Sanctions

NEVADA ATTORNEY GENERAL (Catherine Cortez Masto) TO FILE CRIMINAL CHARGES AGAINST WELLS FARGO FOR FORGERY

FEDERAL RESERVE FINES Wells Fargo $85,000,000.00 for Falsifying Information on Loan App

HAMP: Treasury Department Penalizes Bank of America, JPMorgan Chase and Wells Fargo on Sham Modifications

Tier 2 Yield Spread Premium Confirmed: Wells Fargo to Pay $11 Million to Investors

Wells Fargo Loses Bid to Dismiss Mod-Fraud Claims

ILLINOIS CLASS ACTION VS. WELLS FARGO FAILING TO PROCESS HAMP MODIFICATIONS

Wells Fargo Admits Errors in 55,000 cases: Tries to Minimize Impact

Intricate Cloaks for Securitized Transaction – Wells Fargo and Thornburg

NY JUDGE AWARDS $155,092.00 TO Pro Se HOMEOWNER for Wells Fargo Trespass

After 8 Lawyers turned Her Down — Jury Awards $1.25 million to Borrower In Suit Against Wells Fargo

WELLS WHISTLEBLOWER REVEALS BLACK HOLE FOR DOCUMENTS AND PROCEDURES

 

OCC Finds 6 Banks Have Not Complied With Consent Orders

 

Fannie and Freddie Slammed by Massachusetts AG

 

MASS SUPREME COURT CLARIFIES: YOU CAN’T SELL WHAT YOU DON’T OWN — MISSING HOMEOWNER WINS CASE WITHOUT KNOWING IT

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From Wall Street Journal:

Wells Fargo Is Sanctioned For Role in Mortgage Woes

By Amir Efrati

Updated April 30, 2008 12:01 a.m. ET

Several federal bankruptcy judges recently have lambasted mortgage companies for their treatment of consumers at risk of losing their homes. But industry players in the below-the-radar role of “trustee” in the mortgage chain — typically big financial institutions — have mostly gone unscathed.

14 Responses

  1. from David:
    “These Advances are required to be made only to the extent they are deemed by the servicer to be recoverable from related late collections, Insurance Proceeds, Liquidation Proceeds or amounts otherwise payable to the holders of the Subordinate Certificates.

    jg: this strikes me as hokey and so subject to interpretation of the “only to the extent” as to possibly not be enforceable or tenable. Plus one can see the advances may be paid out of funds which would otherwise go to (and got me how) holders of subordinate certificates, with no connection whatsoever to any particular loan. The only relationship maintained between a particular note and its payments appears to be on the one (of several) set of books maintained by the servicer, but have no bearing on payments the servicer makes to the alleged Creditor. The servicer treats itself as the creditor for the purpose of calling default and it may be that there’s just no reconciling what’s paid to the trust and or deriv holders whose payments clearly are not made solely by the borrowers. If this paragraph is the entirety of what could create a right of subrogation for the servicer’s advances under any particular note, my lay opinion is they may be S out of luck. They appear to have made themselves sureties, at least to some extent, which isn’t all good, given how the law sees the rights of sureties. Imo what separates these deals from other suretyships is that with ‘normal’ ones, any right of subrogation is created for a singular obligation on a singular transaction where recoupment is garnered from essentially the collateral / proceeds of that singular transaction. Here, the servicers can “get theirs” from other transactions / loan / foreclosure proceeds and or by non-payment to those with subordinate rights = no recoupment of advances under any particular note.

    The purpose of making these Advances is to maintain a regular cash flow to the certificateholders,

    jg: why? If the servicer is going to be reimbursed, the only thing I can think of that this accomplishes is artificially impacting the value of the derivs.

    rather than to guarantee or insure against losses. The servicer will not be required to make any Advances with respect to reductions in the amount of the monthly payments on the mortgage loans due to Debt Service Reductions or the application of the Relief Act or similar legislation or regulations.

    **Any failure by the servicer to make an Advance as required under the pooling and servicing agreement will constitute an event of default thereunder, in which case the trustee, as successor servicer, will be obligated to make any Advance, in accordance with the terms of the pooling and servicing agreement.**

    jg: whaaat?!
    1) an event of default (not making advances) makes the trustee the successor servicer (at least to the extent it must make the advances not made by the servicer)??!!

    2) If a servicer’s failure to make advances is a default trigger, I don’t care what this double-talk says about why they make advances, the servicer has made itself a guarantor, co-obligor, or surety or all the above, as has the secn trustee by becoming the party obligated when the servicer fails to perform. Nor given the ways a servicer may recoup its non-agency advances (from ANY f/c sale proceeds, not just those of a particular borrower’s property), do I see the recoupment by servicers as creating rights under any particular note. I see nada which would explicitly authorize f/c even when the servicer has unilaterally deemed its advances non-recoverable. There must be more we’re missing? Nothing says go ahead and f/c when you, the servicer, deem it prudent for your own benefit. A borrower may show in default for 180 days, say, on the servicer’s books, but the alleged creditor may be current. So at what point does the creditor say it wants foreclosure? When it is one month down, and how does it even know this when from what I’ve read and posted here, the trust has no records of any particular borrower’s default or how much of the moolah it received is servicer advances? When the amts available to pay the jr derivs has become also insufficient to pay the senior ones? The banksters want to stand on the UCC for their rights as to notes, but they sure don’t want it considered when they pay the trusts or when they foreclose. These notes have lost their identity far as I can tell and the pooled loans are treated as one ‘event’ / transaction as payments are made to the trusts and as the servicers “get theirs” – except for the one time when the servicer’s records are used to call default – by only those records.

  2. Reblogged this on California Freelance Paralegal and commented:
    Great blog post by Neil Garfield listing the numerous times that Wells Fargo has been criticized by the Courts for illegal, clandestine, arrogant or shameful behavior. I personally have worked on two different cases where Wells Fargo manufactured evidence. I am actually surprised that the list is not at least twice as long!

  3. In most securitizations and whole-loan sales, the owner of the receivables will be entitled to declare a servicer default and terminate the
    servicer upon the occurrence of specified events

    . These events typically include a bankruptcy of the servicer, a material failure by the servicer
    to perform its obligations, and a failure by the servicer to turn over funds on the required basis.

    The termination of these servicing rights, were
    it to occur, could have a material adverse effect on our financial condition, liquidity, and results of operations.

    wala, this is why gmac mortgage llc,rescap, went out of business in bk , rescap bk in 2012.

    the failure of the servicer to give up the funds. payments ect ect

  4. he agreements, as they may have been amended or modified, under which the Debtors and Ally will perform their obligations through the Effective Date, in each case subject to the terms and conditions of each agreement, consist of:

    The Intellectual Property Sublicense Agreement between Residential Capital, LLC and
    GMAC, Inc. (now known as Ally Financial Inc.) dated as of November 30, 2006;

    The Shared Services Agreement between Ally Financial Inc. and Residential Capital, LLC dated as of May 14, 2012, including all applicable Statements of Work thereunder;

    The Client Contract and Addendum between Ally Bank and GMAC Mortgage, LLC dated as of November 29, 2011;

    The Amended and Restated Master Mortgage Loan Purchase and Sale Agreement between Ally Bank and GMAC Mortgage, LLC dated as of May 1, 2012;

    Stipulation and Order With Respect to (A) the Amended and Restated Master Mortgage Loan Purchase and Sale Agreement By and Between GMAC Mortgage, LLC and Ally Bank and (B) Client Contract Between GMAC Mortgage, LLC and Ally Bank [ECF No. 2632];

    The Amended and Restated Servicing Agreement between Ally Bank and GMAC Mortgage, LLC dated as of May 7, 2012;

    Stipulation and Order Reserving Rights With Respect to Debtors’ Motion for Interim and Final Orders Under Bankruptcy Code Sections 105(a) and 363 Authorizing the Debtors to Continue to Perform Under the Ally Bank Servicing Agreement in the Ordinary Course of Business [ECF No. 1420];

    The Amended and Restated Custodial Agreement between Ally Bank and Residential Capital, LLC to be executed, and all other custodial agreements between the Debtors and Ally Bank;

    The Pledge and Security Agreement among GMAC Mortgage, LLC, ResCap, Ally Bank, Ally Financial Inc., GMAC Mortgage Group, LLC, and Ally Investment Management LLC dated as of April 25, 2012;

    The Master Securities Forward Transaction Agreement between Ally Investment Management, LLC and GMAC Mortgage, LLC dated as of April 30, 2012;

    The Servicer Advance Receivables Factoring Agreement among Ally Commercial Finance LLC, Residential Funding Company, LLC, and GMAC Mortgage, LLC dated as of June 17, 2008; and

    All other agreements that have been approved by an order of the Bankruptcy Court during the Debtors’ chapter 11 cases

  5. Advances

    Prior to each distribution date, the servicer is required to make Advances which were due on the mortgage loans on the immediately preceding due date and delinquent on the business day next preceding the related determination date.

    These Advances are required to be made only to the extent they are deemed by the servicer to be recoverable from related late collections, Insurance Proceeds, Liquidation Proceeds or amounts otherwise payable to the holders of the Subordinate Certificates. The purpose of making these Advances is to maintain a regular cash flow to the certificateholders, rather than to guarantee or insure against losses. The servicer will not be required to make any Advances with respect to reductions in the amount of the monthly payments on the mortgage loans due to Debt Service Reductions or the application of the Relief Act or similar legislation or regulations. Any failure by the servicer to make an Advance as required under the pooling and servicing agreement will constitute an event of default thereunder, in which case the trustee, as successor servicer, will be obligated to make any Advance, in accordance with the terms of the pooling and servicing agreement.

    All Advances will be reimbursable to the servicer on a first priority basis from either (a) late collections, Insurance Proceeds and Liquidation Proceeds from the mortgage loan as to which such unreimbursed Advance was made or (b) as to any Advance that remains unreimbursed in whole or in part following the final liquidation of the related mortgage loan, from any amounts otherwise distributable on any of the Class B Certificates or Class M Certificates; provided, however, that any Advances that were made with respect to delinquencies which ultimately were determined to be Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses are reimbursable to the servicer out of any funds in the Custodial Account prior to distributions on any of the certificates and the amount of those losses will be allocated as described in this prospectus supplement. Any servicing fees that have not been paid to the servicer with respect to a liquidated mortgage loan will be paid to the servicer out of Insurance Proceeds and Liquidation Proceeds from that liquidated mortgage loan from amounts otherwise distributable to certificateholders.

    In addition, if the Certificate Principal Balances of the Subordinate Certificates have been reduced to zero, any Advances previously made which are deemed by the servicer to be nonrecoverable

    S-60

  6. LIMITED OBLIGATIONS
    PAYMENTS ON THE MORTGAGE The certificates represent interests only in the trust. The
    LOANS ARE THE PRIMARY SOURCE certificates do not represent an ownership interest in or
    OF PAYMENTS ON YOUR obligation of the depositor, the seller, the servicer or any of
    CERTIFICATES. their affiliates. If proceeds from the assets of the trust are
    not sufficient to make all payments provided for under the
    pooling and servicing agreement, investors will have no recourse
    to the depositor, the seller, the servicer or any other entity,
    and will incur losses.

  7. United States Court of Appeals
    For the Eighth Circuit
    ___________________________
    No. 12-2508
    ___________________________
    Bank of America, N.A.
    Plaintiff – Appellee
    v.
    Gary R. Peterson; Sally L. Peterson
    Defendants – Appellants
    JP Morgan Chase Bank, N.A., and its successors and assigns;
    Horizon Bank, National Association; Clear & Close Title Agency, Ltd.,
    also all heirs and devisees of any of the above-named persons who
    are deceased; and all other persons or entities claiming any right,
    title, estate, lien or interest in real estate described in the Summons
    and Complaint herein
    Defendants
    ____________
    Appeal from United States District Court
    for the District of Minnesota – Minneapolis
    ____________
    Submitted: March 4, 2015
    Filed: April 15, 2015
    ____________
    Before WOLLMAN, BYE, and COLLOTON, Circuit Judges.
    ____________
    WOLLMAN, Circuit Judge.
    This case is before us on remand from the United States Supreme Court. In
    Peterson v. Bank of America, N.A., 135 S. Ct. 1153 (2015), the Court granted a writ
    of certiorari, vacated this court’s judgment in Bank of America, N.A. v. Peterson, 746
    F.3d 357 (8th Cir. 2014), and remanded the case to us for reconsidering in light of its
    decision in Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015).
    In Peterson, we relied upon our court’s decision in Keiran v. Home Capital,
    Inc., 720 F.3d 721 (8th Cir. 2013), in holding that the Petersons’ claim for rescission
    under the Truth in Lending Act, 15 U.S.C. § 1601 et seq., was time-barred by 15
    U.S.C. § 1635(f) because of their failure to file a lawsuit within three years of their
    transaction with Bank of America. 746 F.3d at 360. The Supreme Court held in
    Jesinoski that the Keiran court had erred in holding that a borrower’s failure to file
    a suit for rescission within three years of the transaction’s consummation extinguishes
    the right to rescind and bars relief. 135 S. Ct. at 792.
    In light of the Court’s holding in Jesinoski, we vacate that portion of our
    judgment in Bank of America N.A. v. Peterson that granted Bank of America
    summary judgment on the Petersons’ claim for rescission, reinstate that portion of our
    judgment that vacated the grant of summary judgment to Bank of America on the
    Petersons’ counterclaim for statutory damages, and remand the case to the district
    court for further proceedings consistent with this opinion.

  8. Ed

    Sent from my MetroPCS 4G Android device

  9. Under lease agreements the tenants are unable to challenge the title to ownership.
    Unlike foreclosures……

  10. I will put them into Reverse and CFD right in the…..
    Ole’ Smooches!

  11. Them..
    …well your Honor…nobody else is claiming it and we made notification by publication.

    Me…. Here I am…Can you see me Know?

  12. The Plaintiff as one half of the Estate….
    THE PLAINTIFFS NOTE …..

  13. Seeks ownership to evict tenants.

  14. The foreclosures are really suit for quiet title where the owners can not be found.

    Duh..not recorded.
    Want of Knowledge my GRR….ass!!!

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