Remember, the private market is perfect and never ever makes mistakes like this. Certainly there’s no need to have government regulations protecting consumers from megabanks.
In court documents later, Wells Fargo attorney Robert Bailey of Anglin Flewelling Rasmussen Campbell & Trytten LLP admitted the bank’s mistake: “Wells Fargo paid the amount it determined was owed to the County Assessor: approximately $10,500. This was a mistake. The $10,500 was the tax amount owed on a neighboring property, not Plaintiff’s.” (Bailey did not address the discrepancy between $13,361 and $10,500.)
Bailey added: “In September, 2010 Wells Fargo acknowledged its error in paying the taxes on Plaintiff’s neighbor’s property and corrected it.” By then, however, Delassus was so far behind on his mortgage payments wrongly doubled by Wells Fargo that the bank refused to let him resume his $1,237.69 installments, Trujillo says. He faced a sizable “reinstatement” cost — which is often the past due amount plus fees.
In an unsettling new twist, Delassus couldn’t get Wells Fargo to tell him how much his reinstatement cost was.
Oddly, the judge was apparently just about to rule in Wells Fargo’s favor. WTF?
A) The private market makes mistakes all the time. Allowing for mistakes is part of the market’s function: people who make less or no mistakes succeed better, people who make lots of mistakes fail more, the capital of the latter tends to flow to the former, meaning that more and more capital is handled by people who are better and better at it.
B) This isn’t a mistake in “the market”; if Wells Fargo thought a property was only worth $5000 but someone else knew it was worth $25000, and the property was listed for $20000, Wells Fargo would say no and someone else would say yes, and the someone else would make bank.
This is just Wells Fargo being incompetent, and evil.
C) Financial firms are generally evil, generally run by evil people, and generally exert their utmost efforts to capture the government and its regulatory mechanism to prevent those firms from falling under the watchful eye of some progressive, thoughtful critic of capitalist excess, someone who would find the financial system in crisis and distress and apply the thoughtful, progressive legal reform of…pouring trillions of taxpayer dollars into the corrupt and evil firms, and then passing laws to mandate every American citizen pour (collectively) trillions more into related, equally evil, financial firms.
D) Fuck the banks. Banks are thieving whores, except that whores work for a living and deserve some respect and many thieves have some compassion remaining in their souls. Banks don’t work or care. Fuck the banks.
According to the article, the claims were for “negligence and discrimination against a disabled person.”
Without seeing the complaint it’s difficult to know for sure: but such a discrimination charge is very hard to make stick, and I suspect that the judge was going to rule only on that issue.
Why do you suppose they sued based on that issue, and not on broader issues? If the person is not disabled, is the sort of thing Wells Fargo did legal? (I know I’m asking you questions that you may not know the answer to!)
Ampersand: “If the person is not disabled, is the sort of thing Wells Fargo did legal?”
If it were me, I would have brought a breach of contract action and sued to stop/set aside the foreclosure (and prevent the Bank from selling the property). Discrimination might be hard to make stick and negligence is usually not a claim you can make when there is a contract in place. So, no, I don’t think it would be legal to do what they did, but, based upon the claims they wrote about, the decision might have been the correct one.
Something here is very odd. I suspect that there is something missing from the reporting.
It’s not implausible that there was some kind of time limit in the contract for bringing the error to the bank’s attention (you know, because it’s always someone else’s job to tell a bank it’s made a mistake) and an arbitration clause forbidding lawsuits for simple breach of contract. So to get into court the lawyer would have had to make other arguments.
Yes, I do lots of foreclosure defense (just stopped one on Monday, in fact!)
Here’s the skinny:
First, a lot of foreclosure law is state specific. Some states give banks more power than other states. I live in a VERY consumer friendly state and don’t know what causes of action would exist in that state.
Second, the mortgages usually have specific requirements that the consumer don’t remember. E.g. if you get an incorrect tax bill, you’re supposed to send a copy to the bank with a letter (certified mail is best.) if you call or just write a note (without the tax bill) you may have no rights.
Third, even if there may be a claim, many consumers will shoot themselves in the aorta because they’ll “try on their own first.” Unsurprisingly a lot of consumers don’t know what’s up because of course they’re not lawyers. And instead of calling a lawyer (first consultation is usually FREE, people!!) they decide to DIY and write the wrong letters or make the wrong demands or rely on the wrong proof or call the wrong people.
Then, after they’ve royally screwed up their case, they’ll try to fix it. (Free legal advice: call a lawyer FIRST.) As a result they often kill their case or waive their claims or make factual statements which can really affect their take-home when it comes down to court. Remember that a lot of law is filtering; it’s better to have one great claim than one decent claim and nineteen shitty claims. Laypeople don’t usually work like that.
Third, even if you want a lawyer you can’t always get a good one. Not all lawyers who do this are very good at it. I have stopped my last two foreclosures because of single-word typos buried in 200-page files. If you don’t know how to do the work you can lose even if there’s a case to be made. If this lawyer was about to lose on summary judgment (which shouldn’t happen much) they might not have been very good.
The story doesn’t come right out and say it, but it’s fairly clear that the gentleman was pretty challenged when it came to managing his affairs. (I know the feeling.) There was a throwaway mention of how it took him a couple of months to bring the impending foreclosure to the attention of his lawyer, for example. The writer did a lot of hammering on what assholes you have to be to foreclose on a property because of your own mistake, but very little hammering on what an iron-clad formal case the gentleman had.
Accordingly, when the Wells Fargo executives are beaten to a pulp by the mob, it should be made clear to them that the formal case for their guilt is very weak, and they’re getting the shit kicked out of them in a purely informal, ad hoc, journalistic rather than legalistic, sort of way.
I don’t see a problem with, as a matter of law, requiring businesses to bear 100% the costs of their own foul-ups.
For me, this falls under the category of “things people should maybe not be allowed to contract away.” The potential for abuse is just too great.
Good in principle but hard in practice–OK, not hard, almost impossible to accomplish. The tricky part, if you think about it, is what people call “reasonably foreseeable consequences that are really your fault”
IOW, if you overbill someone’s taxes then what’s a reasonable consequence? money? OK, you might be responsible for paying a lot of penalties and attorney’s fees. And if you end up evicting someone then maybe you’re on the hook for some extra hotel space, and some storage costs, and moving fees. But you’re probably not responsible for someone dying–even if people tend to get upset when they’re wrongfully evicted, they don’t tend to die as a result.
And of course that assumes it’s all your fault. What if they could have stopped the whole thing by calling the number on the top of the mortgage bill, OR by sending in one of the notices on your website, OR by sending you a letter, OR by doing two other things, which they didn’t do?
What if you send them a notice that says “respond within 30 days if you dispute this” and they don’t open their mail for a period of 2 years? I ask because I have clients who literally do not open bank mail. At all. AT. ALL. As in, they say “why am I being evicted?” and after some research I say “dude, the bank bought your house 9 months ago” kind of thing.
These clients (and yes I have had more than one) have ducked the late letters, the warning letters, the statutory letter with extra notice, two or three sheriff services, and their name in the paper–twice–to get to that point. It makes saving their house difficult, to put it mildly.
See the problem?
No, of course I see the problem. My point isn’t that it’s not tricky, and it’s not that there isn’t negligence on both sides, it’s that there’s an inherent power imbalance that corporations can and will exploit to the point of abuse.
So, for example:
Sure … but, then, flip the thing around. When a consumer sends a note to the bank saying “Hey, by my calculations, I’ve paid off my entire mortgage and will now ignore bills from you unless you fax a detailed invoice to #(999)555-1212,” and they don’t, they still get to foreclose on him.
My point isn’t that there ought to be a greater burden on banks than consumers (there actually should be, but whatever), it’s just that we all ought to be play by the same rules, and right now, we don’t. Right now, if you screw up, it’s your fault, and if they screw up and you don’t sufficiently pursue it, it’s your fault.
“Remember, the private market is perfect and never ever makes mistakes like this.”
Aside from the fact that Robert correctly pointed out that this is not a private market issue, I ask – really? Who besides you has ever made THAT assertion?
A point of pedantry, which I indulge just to get the awful taste of agreeing with Myca out of my mouth: the power imbalance has nothing to do with ‘corporations’. A mom-and-pop mortgage company (they exist) can fuck you just as hard as GMAC.
The power imbalance IS quite real. It’s an imbalance in expertise and knowledge. The mortgage companies know all the rules, all the hidden arcana, all the procedures and court processes and laws. Most individuals know that they gotta send in their mortgage payments or else Something Bad will happen, and that’s about it.
I would not go so far as to say that government regulation causes the imbalance; it’s mostly organic. This is complex financial stuff and of course the people doing it all day are going to be able to use the rules more effectively. But those who would fix things with legislation or regulation ought to consider that pretty much every specific fuck-over-the-consumer rule derives directly or indirectly from some previous generation’s attempt to solve an injustice through making more rules.
Rules usually favor the power gamer, not the oppressed. (Power gamers are rarely oppressed for long.) In the case of mortgages, most of the rules that were used to fuck this guy over came out of rules intended to protect him. “In order to foreclose, you must do X, Y, and Z. You must file this form here and that form there and send these notifications in these ways…”
Problem being, naturally, that the bank that wants to foreclose says “ok” and builds up a Fuck The Consumer By Foreclosure division with people skilled in the rules, and they make sure to learn them and follow them. And having implemented a system of formal rules, the legislative and judicial system can’t really turn around and say “oh, but we meant this has to be done in a just way! We didn’t mean for you to foreclose on Mr. Doesnt Open His Mail.” Doesn’t matter what they meant; matters what rules they wrote down and whether or not the company followed them.
Sure. Anyone who has power will abuse it. That includes the homeowners BTW. Helping consumers push the limits of the law (in their favor) is my job :) but I sure as heck won’t pretend that they don’t try to find loopholes just as much as the corporations do.
Right. Cynically, of course, that’s part of the tradeoff for being allowed to borrow hundreds of thousands of dollars at a 4% interest rate. There are other options, of course: you can rent, or save, or borrow privately, or, not-so-simply, deal with a bank and be prepared to hire a lawyer as soon as you can’t make payments. Banks are both better and worse depending on your view.
there really should be; i agree with you.
Personally I’m just going to change my name to Wells Fargo, get a mortgage with same, and promptly default. When the sheriff comes around to evict me, I’ll say “oh yeah, that deadbeat left voluntarily. I’m the new, rightful owner. See? Right there on the paper. That’s me.”
Uncharacteristically, Robert is thinking too small. Fortunately my financial adviser Arlo can set him straight.
Arlo’s heart is in the right place, but before joining the bankers scamming the taxpayer for money, I think I’d try more honorable and socially productive methods of earning a living. Maybe pimping teenage illegal immigrants, or selling kits to build secret meth labs in kitten orphanages. You know, something that gives back.
Name your daughter Petty Cash.