Wells Fargo Wins In Court
Abstract
Industry News Wells Fargo Wins In Court Steve Goode Jul 14, 2022 One lawsuit dismissed, another allowed to move forward on limited grounds KEY TAKEAWAYS The victory was announced earlier this week in a 68-page decision written by U.S. District Judge Katherine Polk Failla for the Southern District of New York. The lawsuits, filed in December 2014 and December 2015, alleged Wells Fargo failed in its duty to: take possession of complete mortgage files and enforce repurchase obligations; provide notice of defaults; and meet prudent servicing standards. After a nearly eight-year legal battle, Wells Fargo Co. has won the dismissal of one lawsuit and much of a second accusing one of the nation's largest banks of failing to properly oversee toxic mortgage-backed securities that played a major role in the 2008 global financial meltdown. Failla, who granted six of the seven Wells Fargo summary judgment motions, determined that Commerzbank was allowed to sue over Wells Fargo's alleged failure to act once it learned that servicers for more than a dozen trusts had liquidated thousands of loans with defective documentation. The lawsuits, filed in December 2014 and December 2015, alleged that Wells Fargo failed in its duty to: take possession of complete mortgage files and enforce repurchase obligations; provide notice of defaults; meet prudent servicing standards; and, exercise due care. The lawsuits sought hundreds of millions of dollars in damages over Wells Fargo's role as a loan trustee. Wells Fargo officials declined to comment Wednesday on the judge's decision.
