When is Wells Fargo NOT Wells Fargo?

Recently, we did a short sale closing with Wells Fargo.  To clarify, our client was in foreclosure with Wells Fargo, he was also being sued by Wells Fargo on his second mortgage.  The plaintiff in both cases were the same – Wells Fargo, N.A.  It is not unusually to be working on a short sale while the property is involved in a foreclosure.  In fact, it sometimes helps the short sale process if the property is being foreclosed.

Through the mediation process with Wells Fargo, we were able to streamline the short sale process and eventually received an approval of the short sale.  My client had attempted several modifications with Wells Fargo – all an exercise in futility with no modification achieved.  The short sale approval stated the minimum that Wells Fargo would accept as their payoff and also the amount Wells Fargo, as the second mortgage, would accept for payment of the second mortgage.  Additionally, my client was offered the amount of $3,000 for relocation assistance.

The closing went as smooth as possible considering the twists and turns involved in any short sale.  The file successfully closed, and Wells Fargo was provided the required monies as outlined in the short sale approval.  File closed, everyone happy, right?  Not so fast.

Yesterday, we received a call from Wells Fargo attorney stating that they did not approve the sale.  Naturally, we provided all the documents to the attorney showing that in fact the sale was approved.  Via email, we received a clarification, that in fact Wells Fargo (the second Wells Fargo) did not approve the short sale.  Their explanation: “Wells Fargo Home Mortgage is the First Lien Holder.  Wells Fargo Home Equity is the Second Lien Holder.  They are all part of Wells Fargo – yes.  But these are two separate contracts, holding two separate interests.”  Additionally, the email continued to explain that while Wells Fargo (the first Wells Fargo) allowed Wells Fargo (the second Wells Fargo) to received $16,500 as part of the short sale process,  Wells Fargo (the second Wells Fargo) would only accept the sum of $8,000 in order to approve the short sale.  You may need to read the last sentence again.

So I patiently await the attorney’s response to our question.  “So, if I understand you correctly, your complaint is that you received TOO much money as part of the short sale, and that you won’t approve the short sale that was already approved unless you receive LESS money?  And that in fact, Wells Fargo is not really Wells Fargo?

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