It’s another head shaker straight out of Florida as “Wells Fargo Bank NA” sues “Wells Fargo Bank NA” for outstanding liens against properties involved in foreclosure. In what sounds like the most idiotic chain of events, the bank has hired an attorney to defend itself from, well, itself. The defense even issued an answer to its own complaint: “Defendant admits that it is the owner and holder of a mortgage encumbering the subject real property. All other allegations of the complaint are denied”
Those bonehead 0%-down mortgages are coming back to bite banks now as they are forced to deal with bonehead litigation. According to Florida law, foreclosures are not valid unless the primary lien holder notifies secondary lien holders of the action so they can respond to it. In order to finance mortgages 100%, lenders created two mortgages, one at 80% and the other at 20% to cover the down payment, making themselves the primary as well as the secondary lien holder.
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